search query: @indexterm CAPITAL / total: 570
reference: 23 / 570
| Author: | Flannery, M.J. Rangan, K.P. |
| Title: | What caused the bank capital build-up of the 1990s? |
| Journal: | Review of finance
2008 : VOL. 12:2, p. 391-430 |
| Index terms: | banking capital assets risk USA |
| Language: | eng |
| Abstract: | In the 1990s, Large U.S. banks dramatically increased their capitalization to the highest levels in more than 50 years. This study documents the buildup of capital, evaluating several potential motivations. The results support the hypothesis that regulatory innovations in the early 1990s weakened conjectural government guarantees enhancing bank counterparties' incentives to monitor and price default risk. There is found no evidence that a bank holding company's (BHC's) market capitalization increases with its asset volatility prior to 1994. After that, the data show a strong cross-sectional relation btw. capitalization and asset risk. |
SCIMA