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Bank capital management : International evidence

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  • De Jonghe, O.G.

    (Tilburg University, School of Economics and Management)

  • Öztekin, Ö.

Abstract

We examine the dynamic behavior of bank capital using a global sample of 64 countries during the 1994–2010 period. Banks achieve deleveraging primarily through equity growth (rather than asset liquidation). In contrast, they achieve leveraging through reduced earnings retention and substantial asset expansion. The speed of capital structure adjustment is heterogeneous across countries. Banks make faster capital structure adjustments in countries with more stringent capital requirements, better supervisory monitoring, more developed capital markets, and high inflation. In times of crises, banks adjust their capital structure significantly more quickly.
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Suggested Citation

  • De Jonghe, O.G. & Öztekin, Ö., 2015. "Bank capital management : International evidence," Other publications TiSEM 678d7410-481b-496f-98d5-d, Tilburg University, School of Economics and Management.
  • Handle: RePEc:tiu:tiutis:678d7410-481b-496f-98d5-d9accade16d9
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