The Role Of Bank Capital In Bank Holding Companies Decisions

Author : Mr.Adolfo Barajas,Mr.Thomas F. Cosimano,Ms.Dalia Hakura,Sebastian Roelands
Publisher : International Monetary Fund
Page : 37 pages
File Size : 40,8 Mb
Release : 2015-03-16
Category : Business & Economics
ISBN : 9781498372237

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The Role of Bank Capital in Bank Holding Companies’ Decisions by Mr.Adolfo Barajas,Mr.Thomas F. Cosimano,Ms.Dalia Hakura,Sebastian Roelands Pdf

This paper examines the role of bank capital in decision-making by bank holding companies (BHCs) in the United States. Following Chami and Cosimano’s (2001) call option approach to bank capital, BHCs optimally choose the amount of capital to insure the bank against becoming capital constrained in the future. We provide empirical support for this model, and find that a higher optimal level of capital leads to higher loan rates. Furthermore, higher loan rates result in lower amounts of lending. Thus, an increase in capital requirements is likely to lead to higher loan rates and a significant reduction in lending.

Author : Adolfo Barajas
Publisher : Unknown
Page : 37 pages
File Size : 45,8 Mb
Release : 2015
Category : Bank capital
ISBN : 1498348181

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The Role of Bank Capital in Bank Holding Companies' Decisions by Adolfo Barajas Pdf

Paper examines the role of bank capital in decision-making by bank holding companies (BHCs) in the United States. Following Chami and Cosimano's (2001) call option approach to bank capital, BHCs optimally choose the amount of capital to insure the bank against becoming capital constrained in the future. We provide empirical support for this model, and find that a higher optimal level of capital leads to higher loan rates. Furthermore, higher loan rates result in lower amounts of lending. Thus, an increase in capital requirements is likely to lead to higher loan rates and a significant reduction in lending. --Abstract.

Author : Mr.Ralph Chami,Mr.Thomas F. Cosimano,Jun Ma,Ms.Celine Rochon
Publisher : International Monetary Fund
Page : 58 pages
File Size : 46,6 Mb
Release : 2017-02-10
Category : Business & Economics
ISBN : 9781475577556

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What’s Different about Bank Holding Companies? by Mr.Ralph Chami,Mr.Thomas F. Cosimano,Jun Ma,Ms.Celine Rochon Pdf

The recent fnancial crisis highlighted the role of Bank Holding Companies (BHCs) in exacerbating the crisis and in transmitting monetary policy beyond the local economy to global markets. Yet, little is known about their behavior, as most models of banking typically focus on banks with a loan desk. We develop a dynamic model of a BHC that encompasses both a trading desk and a loan desk, and explore the role of risk attitude and overleveraging by the trading desk. We trace the impact of monetary policy and market innovations on bank behavior in the presence of Basel III type regulations. To our knowledge, this is a first such exercise. We show that the value of the BHC is enhanced by operating both desks, even if they both are subject to common market shocks. We explore alternative regulatory remedies to ongoing efforts to ring-fence the proprietary trading business, and show that regulations that target bank governance can mitigate possible rogue trading and the overleveraging problem.

Author : Yair E. Orgler,Benjamin Wolkowitz
Publisher : Unknown
Page : 170 pages
File Size : 52,5 Mb
Release : 1976
Category : Business & Economics
ISBN : STANFORD:36105036696891

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Bank Capital by Yair E. Orgler,Benjamin Wolkowitz Pdf

Author : Board of Governors of the Federal Reserve System
Publisher : Unknown
Page : 0 pages
File Size : 40,6 Mb
Release : 2002
Category : Banks and Banking
ISBN : 0894991965

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The Federal Reserve System Purposes and Functions by Board of Governors of the Federal Reserve System Pdf

Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.

Author : Michael A. Jessee,Steven A. Seelig
Publisher : Unknown
Page : 216 pages
File Size : 47,9 Mb
Release : 1977
Category : Bank holding companies
ISBN : STANFORD:36105037000812

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Bank Holding Companies and the Public Interest by Michael A. Jessee,Steven A. Seelig Pdf

Author : United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs
Publisher : Unknown
Page : 976 pages
File Size : 44,8 Mb
Release : 1975
Category : Banks and banking
ISBN : PURD:32754066704267

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Compendium of Major Issues in Bank Regulation by United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs Pdf

Author : Itzhak Swary
Publisher : Unknown
Page : 152 pages
File Size : 47,7 Mb
Release : 1980
Category : Bank holding companies
ISBN : 0835711293

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Capital Adequacy Requirements and Bank Holding Companies by Itzhak Swary Pdf

Author : United States
Publisher : Unknown
Page : 102 pages
File Size : 44,7 Mb
Release : 1919
Category : Banking law
ISBN : PRNC:32101055190308

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The Federal Reserve Act (approved December 23, 1913) as Amended by United States Pdf

Author : Anonim
Publisher : Lulu.com
Page : 294 pages
File Size : 50,6 Mb
Release : 2004
Category : Bank capital
ISBN : 9789291316694

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International Convergence of Capital Measurement and Capital Standards by Anonim Pdf

Author : Jose M. Berrospide
Publisher : Unknown
Page : 50 pages
File Size : 55,6 Mb
Release : 2016
Category : Electronic
ISBN : OCLC:1306285991

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The Effects of Bank Capital on Lending by Jose M. Berrospide Pdf

The effect of bank capital on lending is a critical determinant of the linkage between financial conditions and real activity, and has received especial attention in the recent financial crisis. We use panel-regression techniques - following Bernanke and Lown (1991) and Hancock and Wilcox (1993, 1994) - to study the lending of large bank holding companies (BHCs) and find small effects of capital on lending. We then consider the effect of capital ratios on lending using a variant of Lown and Morgan's (2006) VAR model, and again find modest effects of bank capital ratio changes on lending. These results are in marked contrast to estimates obtained using simple empirical relations between aggregate commercial-bank assets and leverage growth, which have recently been very influential in shaping forecasters' and policymakers' views regarding the effects of bank capital on loan growth. Our estimated models are then used to understand recent developments in bank lending and, in particular, to consider the role of TARP-related capital injections in affecting these developments.

Author : United States. Congress. House. Committee on Banking and Currency
Publisher : Unknown
Page : 888 pages
File Size : 42,6 Mb
Release : 1965
Category : Bank holding companies
ISBN : LOC:0018627538A

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BANK HOLDING COMPANY LEGISLATION. by United States. Congress. House. Committee on Banking and Currency Pdf

Author : Allen Berger,Christa Bouwman
Publisher : Academic Press
Page : 294 pages
File Size : 55,8 Mb
Release : 2015-11-24
Category : Business & Economics
ISBN : 9780128005316

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Bank Liquidity Creation and Financial Crises by Allen Berger,Christa Bouwman Pdf

Bank Liquidity Creation and Financial Crises delivers a consistent, logical presentation of bank liquidity creation and addresses questions of research and policy interest that can be easily understood by readers with no advanced or specialized industry knowledge. Authors Allen Berger and Christa Bouwman examine ways to measure bank liquidity creation, how much liquidity banks create in different countries, the effects of monetary policy (including interest rate policy, lender of last resort, and quantitative easing), the effects of capital, the effects of regulatory interventions, the effects of bailouts, and much more. They also analyze bank liquidity creation in the US over the past three decades during both normal times and financial crises. Narrowing the gap between the "academic world" (focused on theories) and the "practitioner world" (dedicated to solving real-world problems), this book is a helpful new tool for evaluating a bank’s performance over time and comparing it to its peer group. Explains that bank liquidity creation is a more comprehensive measure of a bank’s output than traditional measures and can also be used to measure bank liquidity Describes how high levels of bank liquidity creation may cause or predict future financial crises Addresses questions of research and policy interest related to bank liquidity creation around the world and provides links to websites with data and other materials to address these questions Includes such hot-button topics as the effects of monetary policy (including interest rate policy, lender of last resort, and quantitative easing), the effects of capital, the effects of regulatory interventions, and the effects of bailouts

Author : Mr.Luc Laeven,Harry Huizinga
Publisher : International Monetary Fund
Page : 43 pages
File Size : 54,5 Mb
Release : 2009-09-01
Category : Business & Economics
ISBN : 9781451873542

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Accounting discretion of banks during a financial crisis by Mr.Luc Laeven,Harry Huizinga Pdf

This paper shows that banks use accounting discretion to overstate the value of distressed assets. Banks' balance sheets overvalue real estate-related assets compared to the market value of these assets, especially during the U.S. mortgage crisis. Share prices of banks with large exposure to mortgage-backed securities also react favorably to recent changes in accounting rules that relax fair-value accounting, and these banks provision less for bad loans. Furthermore, distressed banks use discretion in the classification of mortgage-backed securities to inflate their books. Our results indicate that banks' balance sheets offer a distorted view of the financial health of the banks.

Author : Daniel Tarullo
Publisher : Columbia University Press
Page : 256 pages
File Size : 52,9 Mb
Release : 2008-11-30
Category : Business & Economics
ISBN : 9780881324914

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Banking On Basel by Daniel Tarullo Pdf

The turmoil in financial markets that resulted from the 2007 subprime mortgage crisis in the United States indicates the need to dramatically transform regulation and supervision of financial institutions. Would these institutions have been sounder if the 2004 Revised Framework on International Convergence of Capital Measurement and Capital Standards (Basel II accord)—negotiated between 1999 and 2004—had already been fully implemented? Basel II represents a dramatic change in capital regulation of large banks in the countries represented on the Basel Committee on Banking Supervision: Its internal ratings–based approaches to capital regulation will allow large banks to use their own credit risk models to set minimum capital requirements. The Basel Committee itself implicitly acknowledged in spring 2008 that the revised framework would not have been adequate to contain the risks exposed by the subprime crisis and needed strengthening. This crisis has highlighted two more basic questions about Basel II: One, is the method of capital regulation incorporated in the revised framework fundamentally misguided? Two, even if the basic Basel II approach has promise as a paradigm for domestic regulation, is the effort at extensive international harmonization of capital rules and supervisory practice useful and appropriate? This book provides the answers. It evaluates Basel II as a bank regulatory paradigm and as an international arrangement, considers some possible alternatives, and recommends significant changes in the arrangement.