The Effectiveness of Bank Capital Adequacy Requirements : A Theoretical and Empirical Approach

Barrios, Victor;Blanco, J.M.
(2001)

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  • Barrios, Victor
    Author
  • Blanco, J.M.
    Author
Abstract
The aim of this paper is to analyse how banking firms set their capital ratios, that is, the rate of equity capital over assets. In order to study this isue, two theoretical models are developed. Both models deal with the existence of an optimal capital ratio; the first one for firms not affected by capital adequacy regulation, the second one for firms which are. The models have been tested by estimating a disequilibrium model using data of Spanish savings banks.
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Barrios, V., & Blanco, J. M. (2001). The Effectiveness of Bank Capital Adequacy Requirements : A Theoretical and Empirical Approach (ECON Working Papers 2001/01). https://hdl.handle.net/2078.5/34737