bis working papers · bis working papers no 558 why bank capital matters for monetary policy ......

BIS Working PapersNo 558

Why bank capital matters for monetary policy by Leonardo Gambacorta and Hyun Song Shin

Monetary and Economic Department

April 2016

JEL classification E44 E51 E52

Keywords Bank capital book equity monetary transmission mechanisms funding bank lending

BIS Working Papers are written by members of the Monetary and Economic Department of the Bank for International Settlements and from time to time by other economists and are published by the Bank The papers are on subjects of topical interest and are technical in character The views expressed in them are those of their authors and not necessarily the views of the BIS

This publication is available on the BIS website (wwwbisorg)

copy Bank for International Settlements 2016 All rights reserved Brief excerpts may be reproduced or translated provided the source is stated

ISSN 1020-0959 (print) ISSN 1682-7678 (online)

WP558 Why bank capital matters for monetary policy i

Why bank capital matters for monetary policy

Leonardo Gambacorta and Hyun Song Shin1

Abstract

One aim of post-crisis monetary policy has been to ease credit conditions for borrowers by unlocking bank lending We find that bank equity is an important determinant of both the bankrsquos funding cost and its lending growth In a cross-country bank-level study we find that a 1 percentage point increase in the equity-to-total assets ratio is associated with a 4 basis point reduction in the cost of debt financing and with a 06 percentage point increase in annual loan growth



1 Bank for International Settlements E-mail addresses leonardogambacortabisorg

hyunsongshinbisorg We thank Adonis Antoniades Claudio Borio Michael Brei Marc Carlson Jaime Caruana Dietrich Domanski Ulf Lewrick Marco Lombardi Richhild Moessner Kostas Tsatsaronis and in particular an anonymous referee for comments and suggestions Anamaria Illes provided excellent research assistance The views expressed here are those of the authors only and not necessarily those of the Basel Committee on Banking Supervision or the Bank for International Settlements

WP558 Why bank capital matters for monetary policy iii

Contents

Abstract i

1 Introduction 1

2 Bank capital and lending some testable implications 3

3 Data and stylised facts on bank capital 4

4 Empirical analysis 10

41 Elasticity of bank activity with respect to bank capital 10

42 Does equity react to the cycle 11

43 Impact of bank capitalisation on funding costs 13

44 Do less leveraged banks get more funding 17

45 Do less leveraged banks supply more credit 18

46 Is it a simple rebalancing effect 19

47 Market leverage vs accounting leverage 19

48 The effect of bank capital in the monetary transmission mechanism 20

5 Conclusions 22

References 23

WP558 Why bank capital matters for monetary policy 1

1 Introduction

The drying up of the supply of bank credit in the immediate aftermath of the financial crisis has been a key backdrop in the debate on the appropriate post-crisis monetary policy response Tighter credit supply impairs the transmission of monetary policy to the real economy Unlocking bank lending to the real economy has therefore been a key objective of monetary policy For instance the asset purchase programme of the European Central Bank (ECB) has been explicitly couched in terms of unblocking the transmission of accommodative financial conditions through banks to ultimate borrowers (Coeureacute 2014 Draghi 2014) The first phase of the Federal Reserversquos asset purchase programme (QE1) was similarly couched in terms of channelling credit to the real economy through direct purchases of mortgage-backed securities (Adrian and Shin 2009 Gagnon et al 2010)

In parallel bank capitalisation has received attention from financial supervisors and central banks but here the focus has been on the solvency of banks For instance the European Banking Authorityrsquos (EBA) 2014 asset quality review and stress test exercise for European banks focused on the capital adequacy of banks where bank capital is viewed as a loss-absorbing buffer that enhances bank solvency in the face of adverse macroeconomic shocks (eg Steffen 2014)

However solvent banks may nevertheless refuse to lend Indeed a weakly capitalised bank may improve its solvency metric by cutting credit exposures If the banking system as a whole is weakly capitalised there may even be some apparent tension between the monetary policy imperative of unlocking bank lending (which entails expanding credit) and the supervisory objective of ensuring the soundness of individual banks (which entails cutting back credit) Nevertheless our main finding is that this tension is more apparent than real both the macro objective of unlocking bank lending and the supervisory objective of sound banks are better served when bank equity is high

Our paper revisits the role of bank capital as a determinant of the supply of credit from banks There is an extensive literature on the relationship between bank capital and lending which we review below Our distinctive contribution is to shed light on the mechanism involved in the bank lending channel A bank is both a lender and a borrower a bank borrows in order to lend In this context bank capital bears on the bank as a borrower and in turn affects the bankrsquos actions as a lender Specifically we find that a higher level of bank capital implies a substantial cost advantage for the bank as a borrower and in turn induces the bank to increase credit at a faster pace In particular we find that a 1 percentage point increase in the equity-to-total-assets ratio is associated with a reduction of approximately 4 basis points in the overall cost of debt funding (deposits bonds interbank borrowing etc)

This quantitative result represents an important benchmark Given that debt funding represents around nine-tenths of total liabilities the effects of bank capital on the overall cost of bank funding is substantial A back of the envelope calculation indicates that the greater retention of net income by the bank as retained earnings would almost pay for itself through lower cost of debt even if the cost of equity typically approximated by the Return on Equity is presumed to be quite high More importantly a bank with a larger equity base can be expected to lend more Indeed consistent with this reasoning we find that banks with higher capital have higher lending growth A 1 percentage point increase in the equity-to-total-assets ratio is

2 WP558 Why bank capital matters for monetary policy

associated with a higher subsequent growth rate in lending of 06 percentage points per year

Our result adds to the accumulating empirical evidence that higher bank capital is associated with greater lending A recent study by the European Banking Authority (EBA (2015)) finds substantial beneficial credit supply effects of greater bank capital in a cross-country study of European banks Michelangeli and Sette (2016) use a novel micro dataset constructed from web-based mortgage brokers to show that better capitalised banks lend more More generally empirical evidence shows that in economic systems underpinned by relationship-based lending adequate bank capital allows financial intermediaries to shield firms from the effects of exogenous shocks (Bolton et al 2016 Gobbi and Sette 2015)

Figure 1 gives a preview of our main findings The three panels in Figure 1 are summary plots of the raw data from the empirical database of 105 advanced economy banks used in our empirical analysis A more detailed description of the dataset follows below For now Figure 1 plots the average levels of leverage defined as the ratio of total assets to equity for the 105 banks over the sample period The three panels show how bank leverage is related to debt funding cost (left panel) growth of debt funding (middle panel) and the growth of lending (right panel)

The scatter plots in Figure 1 overstate the noise in the slope relationships as the plots are from the raw data without controls our panel regressions that control for bank and macro variables reveal an even clearer pattern Nevertheless even from the noisy scatter charts we see the key underlying relationships Lower leverage is associated with lower debt funding costs and a higher growth rate of lending

Our results highlight the possible tensions between the interests of some bank stakeholders and the wider public interest of maintaining a smoothly functioning banking system that can supply credit in support of economic activity New equity issuance is not the only way that banks could increase capital ratios Reducing cash dividends would similarly achieve the aim of raising bank equity through retained earnings Nevertheless banks have chosen to pay out substantial cash dividends

Bank capital and loan growth1 Figure 1

Cost of debt funding Debt funding Lending

1 The panels represent scatter plots between the average level of leverage for a group of 105 international banks (details to be given below) and some bank-specific indicators average cost of funding average growth rate of non-equity financing average annual growth rate of lending Standard errors are shown in brackets

Sources BankScope authorsrsquo calculations

1

2

3

4

5

6

10 20 30 40 50 60 70

y = 2457 + 0033x (020) (001)

Total assetsEquity

Cos

t of n

on-e

quity

fund

ing

R2 = 016

ndash7

0

7

14

21

10 20 30 40 50 60 70

y = 11092 - 0112x (082) (003)R2 = 012

Total assetsEquity

Gro

wth

of n

on-e

quity

fund

ing

ndash7

0

7

14

21

10 20 30 40 50 60 70

y = 10744 - 0138x (093) (003)R2 = 014

Total assetsEquity

Gro

wth

of l

endi

ng


even in those regions (such as the euro area) where bank lending has been widely recognised as being inadequate in supporting economic activity Back-of-the-envelope calculations indicate that the total dividends paid out by euro area banks since 2007 amounts to almost 50 percent of their aggregate end-2013 retained earnings ndash the core of banksrsquo book equity (Shin (2014))

Our findings suggest that greater retention of bank earnings and hence higher bank capital hold implications for monetary policy transmission as well as for bank soundness Indeed to the extent that credit is an essential ingredient in the transmission of monetary policy to the real economy our results hold implications for the monetary policy mandate of the central bank as well as for its mandate as a financial supervisor

The remainder of the paper is organised as follows The next section reviews the literature on bank capital and lending behaviour and derives some testable predictions Section 3 discusses the data and some stylised facts concerning bank capital Section 4 presents our empirical results and the robustness checks The last section summarises the main conclusions

2 Bank capital and lending some testable implications

The effects of bank capital on lending have been extensively debated especially after the 1988 Basel Capital Accord A vast empirical literature has examined the impact of capital requirements on bank risk-taking2 Initially attention was paid to the effects of the Basel Accord on banksrsquo risk-taking profiles (eg Dewatripont and Tirole 1994) The effects of bank capital on lending and monetary policy took on greater prominence with the literature on the ldquobank lending channelrdquo (Kashyap and Stein 1995 Jayaratne and Morgan 2000 Kishan and Opiela 2000) which found that bank capital can mitigate the effects of any fall in deposits on lending during periods of monetary tightening

These considerations and the different views on the ways bank capital could affect lending raise some important questions In particular what is the link between bank capitalisation and loan supply Does a greater amount of capital (or lower leverage ratio defined as total assets over equity) induce banks to lend more What are the mechanisms at play that explain the negative link between bank leverage and new lending shown in Figure 1 Two possible mechanisms could be at work

1 ldquoFreerdquo bank capital (capital in excess of minimum capital requirements) could be used by banks to finance consumption or profitable investments (or more generally to protect a lending relationship in the case of a negative shock such as a monetary tightening) This explanation implies that equity reacts to cycle conditions

2 For a more comprehensive review see Martynova 2015 Boot 2000 Thakor 2005 Bolton et al 2016

point to the importance of relationship lending while the impact of capital on loan risk is examined by Flannery 1989 Gennotte and Pyle 1991 Blum and Hellwig 1995 Hellman et al 2000 Kim and Santomero 1988 Rochet 1992 Repullo 2004 De Jonghe 2010 and Kashyap et al 2010 While the majority of studies link capital with lower risks Barth et al 2004 and Demirguumlccedil-Kunt and Detragiache 2011 find mixed evidence Capital as a constraint on lending in a downturn is examined by Van den Heuvel 2002 and Bolton and Freixas 2006 Dagher et al (2016) assess the benefits of bank capital in terms of its ability to absorb losses


2 Well-capitalised banks are perceived as ldquoless riskyrdquo by depositors and investors and have easiercheaper access to forms of funding such as bonds or uninsured deposits This channel implies that debt reacts to cyclical conditions

Depending on which of these two channels is at work book equity affects banksrsquo lending in distinct ways Adrian and Shin (2010) note that banks finance new projects mainly by issuing new debt and shrink lending by reducing debt rather than through fluctuations in the use of its own funds ndash ie its book equity For this reason book leverage (defined as the ratio of total assets to the book equity) is procyclical it tends to increase in a boom and decline in a downturn In this case the relevant channel is (2) not (1) On the contrary ndash given the low incidence of equity to other forms of bank funding (typically in the ratio of one to nine) ndash if bank capital is used ldquodirectlyrdquo to finance new investment projects we should observe a high elasticity (more than 1) of bank total assets to equity

Based on the discussion above we have the following testable predictions

If the main channel that explains the negative link between bank leverage and bank lending is (1) we should observe that

i) Bank equity has an elasticity of greater than one with respect to total assets

ii) Bank equity is positively correlated with cyclical conditions It increases in a boom and decreases in a bust

On the contrary if banks finance new activities mainly by issuing new debt and equity facilitates such operations through lower funding costs then another set of testable predictions may enter the picture In particular we examine the following testable predictions

iii) Less leveraged banks pay less for their debt funding

iv) Less leveraged banks get more debt funding

v) Less leveraged banks supply more lending

vi) The effects of iii)-v) should be less pronounced (not significant) when controlling for market leverage which is influenced by more volatile financial conditions

3 Data and stylised facts on bank capital

Bank-level data are obtained from BankScope a commercial database maintained by Fitch and the Bureau van Dijk We consider consolidated bank statements Thus in what follows the relevant business unit of analysis is the internationally active bank taking decisions on its worldwide consolidated assets and liabilities Our choice of the unit of analysis is also consistent with the practice of measuring capital adequacy at the group level Our sample is at an annual frequency and includes major international banks from advanced economies It covers the 19 years from 1994 to 2012 a period spanning different economic cycles a wave of consolidation and the global financial crisis

The sample of banks covers the major financial institutions from the eleven G10 countries (Belgium Canada Switzerland Germany France Italy Japan the Netherlands Sweden the United Kingdom and the United States) plus those of Austria Australia and Spain To ensure consistently broad coverage we select banks


by country in descending order of size to cover at least 80 of the domestic banking system With this procedure we identified in total 105 consolidated banking institutions that hold over 70 of worldwide banking assets as reported in The Banker magazine at end-20083 The consolidation of the banking sector during the last two decades makes it important to control for mergers and acquisitions (MampA) Doing so serves to exclude spurious jumps in individual balance sheet positions that reflect only banksrsquo reorganisations In particular we adjust for 155 mergers and acquisitions over the sample period by constructing pro-forma entities at the bank holding level4

For each country Table 1 shows the number of banks in our sample that are headquartered in each jurisdiction along with their combined asset size and location of clients The columns on the ldquolocation of the ultimate borrowerrdquo5 in the table show

3 See httpwwwthebankercomTop-1000-World-Banks

4 We construct individual bank histories by drawing on the merger and acquisition dates of large banking institutions provided to us by central banks and complemented by Bureau van Dijkrsquos Zephyr database Starting with 260 consolidated banking groups we adjust banksrsquo financial statements backwards by aggregating the reported positions of the acquirer and the target bank prior to the merger or acquisition The approach used in this paper for the treatment of mergers has been widely used in the literature See for example Ehrmann et al (2003) Gambacorta and Mistrulli (2004) and De Haas et al (2015)

5 The concept of ldquoultimate borrowerrdquo is based on the country where the ultimate risk or obligor resides after taking into account risk transfers The information for the location of the ultimate borrower is not available at the individual bank level and it has been estimated by merging BankScope data with data from the BIS consolidated international banking statistics

Composition of the database Table 1

Countries Assets Location of the ultimate borrower No of banks

No of MampA

No of banks with some forms of public intervention(2012 bil USD) Domestic (2012 bil USD)

Austria 610 702 298 5 5 5

Australia 3073 742 258 7 4 0

Belgium 1169 579 421 3 7 3

Canada 3402 686 314 6 3 0

Switzerland 2569 370 630 5 5 1

Germany 5169 775 225 13 3 2

Spain 3542 674 326 14 14 2

France 8731 723 277 6 13 5

Italy 3177 808 192 12 35 6

Japan 3555 828 172 5 7 0

Netherlands 993 604 396 1 0 0

Sweden 1921 583 417 4 5 1

United Kingdom 10730 627 373 7 15 3

United States 10273 738 262 17 39 14

Sumaverage 58914 674 326 105 155 42

Note Unweighted averages across banks per country Averagesum indicates unweighted averages or sums () over countries Location of the ultimate borrower is estimated by merging BankScope information with data from the BIS international banking statistics No of MampA indicates the number of mergers and acquisitions that have been taken into account in the construction of pro-forma banks

Sources BankScope BIS international banking statistics National central banksrsquo statistics authorsrsquo calculations


unsurprisingly that banks headquartered in different countries also differ in the level of international activity and exposure ranging from less than 20 of claims on borrowers outside their home country for Italian and Japanese banks to more than 60 for Swiss banks It is thus important to adjust our economic cycle measures for the location of bank assets in the form of a weighted average of the country-specific cyclical variables for locations in which banks operate Monetary policy measures are weighted averages across the jurisdictions in which each bank gets funding Finally a total of 42 banks in our sample received public recapitalisations during the global financial crisis our econometric analysis therefore has to take into account both the crisis and the public bailouts

In the analysis we consider four measures of leverage i) a standard leverage ratio given by total bank assets over total common equity ii) a Basel III measure of leverage given by total exposure over Tier 1 capital iii) a risk-weighted leverage given by risk-weighted assets over Tier 1 and iv) a market measure of leverage given by the market value of bank assets (market capitalisation of equity plus debt) over

Different definitions of leverage1

In per cent Figure 2

Total assetsEquity Total exposureTier1

Risk weighted assetsTier1 Assets market valueEquity market value

1 The solid line represents the median values of the leverage ratio The region in between the dotted lines delimits the second and third quartile of the distribution


0

8

16

24

32

96 98 00 02 04 06 08 10 12

Median 25th percentile 75th percentile

16

20

24

28

32

96 98 00 02 04 06 08 10 12

6

8

10

12

14

96 98 00 02 04 06 08 10 12

0

10

20

30

40

96 98 00 02 04 06 08 10 12


market capitalisation (equal to the share price multiplied by the number of shares outstanding)6

Figure 2 shows the distribution across individual banks of the four leverage ratios in the sample (median and quartiles) As expected there is considerable variation across banks and ratios A few other patterns emerge First as expected the level of the leverage ratio with the exposure measure at the numerator (panel b) is structurally higher than the risk-weighted measure (panel c) This is not surprising since the exposure measure is not weighted for risk Second banks hold on average significant (discretionary) Tier 1 capital in excess of the 25 regulatory maximum of risk-weighted assets (panel c) Only in very few cases did banks report higher leverage ratios than the regulatory maximum Third leverage ratios based on accounting measures (first three panels) fell after the Lehman default (September 2008) owing to market discipline effects public recapitalisations and the announcement of the introduction of the Basel III capital regulation (December 2009) The downward trend in the first three panels of Figure 1 is more pronounced for risk-weighted capital ratios (the shaded area indicates the post-Lehman period) The fact that the risk-based leverage fell more strongly than the other leverage measures in response to the crisis suggests that banks could have invested in assets with lower risk weights although there is evidence that banks from the advanced economies increased capital through equity issuance cuts in dividends and increases in retained earnings (Cohen and Scatigna 2014) As one can see from the last panel of Figure 1 the market-based leverage is much more volatile compared to the other accounting leverage ratios Finally in the global financial crisis period the market leverage increased reflecting the low equity valuation levels of many banks especially in Europe against the backdrop of difficult economic conditions in their home markets (Gambacorta and van Rixtel 2013)

Second leverage ratios vary importantly across regions The highest ratios are reported by banks headquartered in the euro area and other European countries while North American banks reported the lowest ratios However European banks report lower risk-weights on their assets the ratio between risk-weighted assets and total assets the so-called risk density function is lower for European banks

Table 2 also presents statistics for two cycle indicators (the annual growth rate of GDP and the stock market growth) and a monetary policy measure (three-month interbank rate) The two cycle measures are calculated as a weighted average across the jurisdictions in which banks are active using foreign claims data from the BIS consolidated banking statistics The adjustment is intended to control for both domestic and international macroeconomic conditions so that the cycle indicators can capture the macroeconomic conditions in the major countries in which banks operate We approximate monetary policy conditions based on the best estimate of the currency composition of the banksrsquo liabilities weighting the three-month interbank rate correspondingly As a result of this weighting each bank in our sample faces different monetary conditions The average of the weighted level of the short-

6 Leverage definitions ii) and iii) have different numerators and relate to different concepts of solvency

Definition ii) corresponds to the leverage ratio recently adopted by the Basel Committee on Banking Supervision (BCBS 2014) A bankrsquos exposure is defined by the sum of the following components (a) on-balance sheet exposures (b) derivative exposures (c) securities financing transaction exposures and (d) off-balance sheet exposures Definition (iii) corresponds to the capital to risk-weighted assets ratio and includes at the numerator on-balance sheet and off-balance sheet exposures weighted according to risk based on the regulatory requirements (BCBS 1988 2005) For more details see Brei and Gambacorta (2016)


term rates in the individual jurisdictions are however quite similar (the range goes from 32 to 37) because the banks in our sample get funding in more than one currency and are exposed to similar global financial conditions

Table 3 reports some characteristics of low leverage banks (those in the first quartile of the distribution of the total assets-to-total equity ratio) and high leverage banks (those in the last quartile) It appears that low-leveraged banks pay a lower cost of funding and have a higher annual growth rate in debt financing and lending It is worthy of note that low-leveraged banks have also a lower level of asset risk (measured by asset volatility) and higher profitability (ROA) than highly leveraged banks

Average bank leverage by macro region Table 2

Region

Total assets

Equity ()

Total exposureTI

ER 1 ()

Risk weighted

assetsTIER 1 ()

Market value

assets market value

equity ()

Real GDP growth adjusted

()

Stock market growth adjusted

()

Three-month

interbank rate

adjusted ()

Total assets (2012 bil

USD)

Number of banks

Asia-Pacific 243 226 123 147 247 269 373 6628 12

Euro Area 270 276 121 239 170 613 319 19967 54

Other Europe 246 334 111 166 227 704 345 14620 16

North America 154 222 105 94 229 633 325 13675 23

Averagesum 228 265 115 161 218 555 340 54890 105

Note Unweighted averages across banks per region over the period 1994-2012 Asia-Pacific indicates AU and JP Euro Area represents AT BE DE ES FR IT and NL North America is CA and US and Other Europe indicates CH UK and SE ldquoAveragesumrdquo indicates unweighted averages or sums over countries ldquoAdjustedrdquo refers to the adjustment of the macroeconomic variables for the location of international claims on a consolidated basis

Sources BankScope BCBS - QIS database BIS consolidated international banking statistics Moodyrsquos KMV Credit Monitor authorsrsquo calculations

Summary statistics by bank type Table 3

Low leveraged banks

Highly leveraged banks

Difference All banks

Number of banks 27 26 105

Observations 423 369 1587

Assets (bil USD) 2687 6768 -4081 4026

Cost of debt financing 26 35 -09 31

Annual growth rate of debt financing 805 622 183 856

Annual growth rate of lending 741 464 277 752

Asset Risk 402 5 -10 482

ROA 095 019 076 058

Non-interest income over income 3159 1705 145 2299

Note Unweighted averages over the period 1994-2012 Banks with a low and high leverage have been identified using the first and fourthquartile of the ratio between total assets and common equity indicate that averages are significantly different across bank groups at the 1 5 and 10 level using a t-test

Sources BankScope Moodyrsquos KMV Credit Monitor authorsrsquo calculations


Summary statistics of the variables used in the regressions Table 4

Variable name Variable description Number of

observations Mean Std Dev Min Max

Endogenous variables

Log Equity Logarithm of bank equity (in billion dollars) 1587 2061 1392 ndash2486 5398

Log Assets Logarithm of bank total assets (in billion dollars) 1587 5078 1475 0483 8245

Equity growth Growth rate of bank equity 1587 9295 17102 ndash70495 79620

Tier1 growth Growth of Tier 1 bank capital 1278 0093 0158 ndash0948 1349

Cost of funding Average cost for debt funding (percentage points) 1587 3107 1599 0008 8924

Funding growth Growth rate of debt funding 1587 8555 13748 ndash79976 94612

Loan growth Growth rate of lending 1587 7516 12020 ndash37582 72616

Total assetsequity Accountancy leverage measure given by total bank assets over total common equity

1587 23553 14786 5033 174116

Exposure measureTier1

Basel III measure of leverage given by total exposure over Tier 1 1331 26542 12700 6996 99589

RWATIER1 Risk-weighted assets over Tier 1 1442 11577 3022 2240 22727

Total Assets market value total market value of equity

Market measure for leverage given by the market capitalisation over the market value of equity

958 15957 13955 3048 99152

Bank-specific characteristics

Asset risk Asset volatility std dev percentage change in market value of assets 1587 4764 2772 0174 31724

ROA Return on assets given by profits before taxes over total assets100 1587 0579 0640 ndash6002 3704

Rescued Dummy variable that takes the value of one if a bank had public capital on its balance sheet and 0 elsewhere

1587 0395 0489 0000 1000

Macro controls(1)

RGDP Growth rate of real GDP adjusted 1587 2022 1984 ndash5277 5925

Stock market Stock market growth adjusted 1587 5928 18030 ndash35004 54362

MP Change in the three-month interbank interest rate adjusted 1587 ndash0269 1158 ndash3867 1767

MP Level of the three-month interbank interest rate adjusted 1587 3307 1914 0252 9359

Other controls

CRISIS Dummy that takes the value of 1 in the years 2008ndash12 and 0 otherwise 1587 0360 0480 0000 1000

IFRS Dummy that takes the value of 1 if a bank reported under IFRS and 0 elsewhere 1587 0360 0480 0000 1000

Note The sample period goes from 1995 to 2012 (1) The growth rate of real GDP and the stock market capitalisation are weighted according the location of banksrsquo ultimate borrowers the interbank rate is a weighted averages across the jurisdictions in which each bank gets funding

Sources BankScope National central banks BCBS - QIS database BIS consolidated international banking statistics Moodyrsquos KMV CreditMonitor authorsrsquo calculations


Our results are consistent with the view that well-capitalised banks are perceived as ldquoless riskyrdquo by depositors and other bank creditors and have easier access to funding on more favourable terms However these indications are only very preliminary because the cost of bank funding and the dynamics of deposits and lending are influenced not only by bank capitalisation but also by other factors (macroeconomic and monetary policy conditions other bank-specific characteristics) for which we are not able to control for in the sample descriptive statistics reported in Table 3 Summary statistics of all the specific variables used in the regressions are reported in Table 4

4 Empirical analysis

41 Elasticity of bank activity with respect to bank capital

We begin by documenting some stylised facts First we look at the long run elasticity between total assets and equity We run the following OLS regression

( Assets) ( Equity)ijt ijt ijtLn Total Ln Common (1)

where ( Assets) ijtLn Total denotes the logarithm of total asset balance sheet items

( Equity) ijtLn Common indicates the logarithm of total common equity in period t of

bank i headquartered in country j The sample used goes from 1995 to 20127

The results reported in the first column of Table 5 indicate that the hypothesis of unit elasticity between the two variables cannot be rejected Clearly this regression does not establish any causal link between the two variables it simply indicates that there is a proportional relationship between equity and total assets8 Given the low proportion of equity in bank funding this means that we cannot expect that an increase in equity translates directly into large increases in lending Therefore we may rule out channel 1 as being quantitatively important

To examine the possibility that leverage could depend on banksrsquo objectives we modify the specification (1) with two additional control variables i) bank profitability (return on assets ROA) and ii) asset risk (standard deviation of the annual percentage change in the market value of assets)9 These control variables are typically used in studies on the determinants of bank capital (Milne and Whalley 2001 Ayuso et al

7 As the variable used in the regression are I(1) we follow Phillips and Moon (1999) and we initially

exclude fixed effects in the regression so that coefficient estimates have standard normal distribution

8 The presence of a long run relationship between the log of total assets and the log of equity can be verified by checking the stationarity of the residuals ijt of equation (1) The Fisher Test on the

residuals using a Phillips-Perron approach reported in Table 5 always reject the null hypothesis of unit root of

ijt against the alternative that at least one series in the panel is stationary Similar results

are obtained using the methodology proposed by Pedroni (1999)

9 For listed banks we use the asset volatility measure from Moodyrsquos KMV Credit Monitor database defined as the standard deviation of the annual percentage change in the market value of a firmrsquos assets (calculated over the last three years) For the 32 non-listed banks in our sample we have approximated asset volatility by the standard deviation of the annual percentage change in the book value of total assets over a three-year window using the efficient estimator of standard deviations for small samples (Longford 2010)


2004 Jokipii and Milne 2008 Berger et al 2008 Gropp and Heider 2010) The results presented in column II of Table 5 remained qualitatively very similar

Second we include bank-level fixed effects in the regression (ie by allowing to the constant in the long-term relationship to be different across banks) based on the idea that firms adjust their equity to unobserved bank-specific targets (Lemmon et al 2008 Gropp and Heider 2010 Oumlztekin and Flannery 2012 De Jonghe and Oumlztekin 2015) The elasticity between total assets and equity is equal to 0847 (se 0009) significantly lower than 1 (see column III of Table 5) A final specification in column IV of Table 5 also includes time fixed effects that aim at capturing changes in business cycle conditions The elasticity drops in this case to 0664 (se 0014) Similar results (not reported) are obtained considering the total exposures of the bank (that also include off-balance sheet items) instead of total assets (=0657 se=0018 in the more general specification)

42 Does equity react to the cycle

The second testable hypothesis is that equity reacts to changes in cyclical conditions During booms banks might find it easier to raise capital or accumulate retained earnings but during recessions they might resort to adjusting their asset portfolios As equity is non-stationary we examine a model in growth rates to avoid the problem of spurious regressions In particular we estimate the following regression

1 1( ) ( ) ij t i i jt i t i j t i j t i j tL n E q u ity L n E qu ity Y X IF R S (2)

where ( ) ijtLn Equity denotes the annual growth rate of equity in period t of bank i

headquartered in country j10 The lagged dependent variable ( 1( ) ijtLn Equity )

captures equity adjustment costs caused by asymmetric information and rigidities in

10 The model in log differences has been chosen because variables in levels are integrated of order one

(this has been verified by an augmented Dickey Fuller test) This approach avoids the problem of spurious correlations

Elasticity between total assets and common equity Table 5

Variables Ln (Total assets)

(I) Ln (Total assets)

(II) Ln (Total assets)

(III) Ln (Total assets)

(IV)

Ln(Common Equity) 09986 09908 08470 06641

(00092) (00083) (00094) (00176)

Bank-specific characteristics (1) no yes yes yes

Bank fixed effects no no yes yes

Time-fixed effects no no no yes

Ho Unit root test residual (2) 0000 0000 0000 0000

Test unit elasticity (Prob gt F =) 0875 0267 0000 0000

Observations 1587 1587 1587 1587

R-squared 08785 09046 09795 09829

Note The sample includes annual data of 105 international banks operating in 14 advanced economies over the period 1995-2012 Annual data Standard errors in parentheses plt001 plt005 plt01 (1) Bank specific characteristics include ROA and asset risk (2) Fisher Test for panel unit root using a Phillips-Perron test (4 lags) P-values are in parenthesis


capital markets that make it difficult to raise capital at short notice in response to negative capital shocks (Myers and Majluf 1984) The direct costs of remunerating shareholders and the risk profile of banks which affect banksrsquo optimal capital decisions are controlled for by means of bank-specific characteristics ( 1ijtX ) lagged

one period to mitigate possible endogeneity problems Finally we include ndash one at a time ndash a cycle indicator itY to test how banks adjusted their equity to changes in business or financial conditions

It is important to note that by the inclusion of bank fixed effects we can interpret the coefficient estimates as variation within banks over time

The vector 1ijtX of bank-specific control variables includes as in the section

above bank profitability (return on assets ROA) and asset risk (standard deviation of the annual percentage change in the market value of assets) We also include a dummy variable IFRSijt that takes the value of one once a bank has adopted International Financial Reporting Standards (IFRS) and 0 elsewhere This dummy controls for changes in the measurement of certain balance sheet items and other differences in accounting due to the introduction of the new IFRS standards notably the rules concerning the offsetting of derivatives on the asset and liability side Most countries (except Canada Japan and the United States) changed accounting standards from local Generally Accepted Accounting Practices (GAAP) to IFRS in 2005ndash06

The results are presented in Table 6 The models are estimated using the GMM estimator due to Arellano and Bond (1991) which ensures efficiency and consistency provided that the models are not subject to serial correlation of order two and that the instruments used are valid (which is tested for with the Hansen test) The first two columns indicate that the growth rate of equity is not correlated with our cycle indicators the real GDP growth and stock market growth This result is in line with Adrian et al (2015) that shows that banks actively smooth book equity by adjusting payouts to achieve a desired trajectory of book equity They also show that there is an apparent structural break after the 2008 crisis For this reason we introduce interaction terms between a dummy tC (that takes the value of one in 2008ndash12 and 0 elsewhere) and the regression variables thus allowing for a parameter shift in the estimated response depending on the state of the economy The dummy tC aims at capturing not only the effect of the financial crisis but also changes in banksrsquo behaviour due to the Basel III regulatory reform and the anticipation of more stringent capital requirements The model to be estimated becomes

1

1

( ) ( ) ( )

( ) ( )ijt i t t ijt

t it t ijt ijt ijt

Ln Equity C C Ln Equity

C Y C X IFRS

(2rsquo)

Interestingly the finding reported in the third and fourth columns of Table 6 indicate that the growth rate of equity is reduced when the economy is booming and increases in a financial crisis (due possibly to capital injections) These results are consistent with the finding that leverage is procyclical (Adrian and Shin 2010 2014 Adrian et al 2014 Laux and Rauter 2014) The results do not change if we use Tier 1


instead of common equity as the measure of bank capital (see columns (V) to (VIII) in Table 6) or changing the specification11

43 Impact of bank capitalisation on funding costs

The results described in the two sections above indicate that equity could have a limited role in ldquodirectlyrdquo financing household consumption or profitable investments (or more generally to protect a lending relationship) If bankrsquos equity has a (less than) unit elasticity with total assets given its limited size with respect to the bankrsquos total balance sheet it cannot finance a larger portion of assets Moreover bank equity is negatively correlated with business and financial conditions this means it is not expanded in a boom or decreased in a bust In this section we analyse an alternative explanation where bank capitalisation determines the cost of debt funding

11 In particular we have considered two additional robustness checks First we have analysed equation

(2) and (2rsquo) in levels instead than in growth rates Second we have run equation (2) and (2rsquo) using pooled OLS without the lagged dependent variable and fixed effects In both cases results (not reported for the sake of brevity) are qualitatively very similar

How does equity react to changes in the business and financial cycle Table 6

Explanatory variables Dependent variable Growth rate of common equity

Dependent variable Growth rate of TIER1 capital

(I) (II) (III) (IV) (V) (VI) (VII) (VIII)

Real GDP growth adjusted (1) 04100 ndash3223 ndash00694 ndash16221

(03405) (11160) (02540) (06021)

Real GDP growth adjusted C (1) 41825 11961

(12893) (07264)

Stock market price growth adj (1) 00838 ndash01014 00208 ndash01026

(00810) (00431) (00259) (00310)

Stock market price growth adj C (1) 02878 01142

(00682) (00544)

Lagged dependent variable yes yes yes yes yes yes yes yes

Bank specific characteristics (2) yes yes yes yes yes yes yes yes

Bank fixed effects yes yes yes yes yes yes yes yes

Observations 1587 1587 1587 1587 1278 1278 1278 1278

Serial correlation test (3) 0210 0190 0901 0993 0822 0830 0233 0349

Hansen Test (4) 0174 0156 0119 0117 0567 0591 0529 0572

Note The sample includes annual data of 105 international banks operating in 14 advanced economies over the period 1995-2012 Standard errors in parentheses The model is estimated using the dynamic Generalised Method of Moments (GMM) panel plt001 plt005 plt01 (1) Cycle indicators are weighted according the location of banksrsquo ultimate borrowers (2) Bank specific characteristics include ROA asset risk and IFRS dummy (3) Reports p-values for the null hypothesis that the errors in the first difference regression exhibit no second-order serial correlation (4) Reports p-values for the null hypothesis that the instruments used are not correlated with the residuals


Indexing again individual banks with k countries where banks are headquartered with j and years with t we carry out the empirical analysis using the following model

1 1

1

Cost_funds Cost_funds

ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(3)

where Cost_funds ijt is the average cost of funding given by total interest rate paid

over the total level of debt (excluded equity and reserves) One lag of the dependent variable is introduced in order to obtain white noise residuals The vector 1ijtX

includes together with bank risk and profitability indicators other bank-specific controls that could affect the cost of funding i) the share of short-term funding (deposits money market and other forms of short-term debt) over total debt funding ii) a diversification ratio given by non-interest income to total income iii) a dummy variable that takes the value of 1 if a bank had public capital on its balance sheet in any given year and 0 elsewhere

Results are presented in Table 7 In the first three columns we use ndash one at a time ndash the three different measures of accounting leverage i) the standard one given by total bank assets over total common equity ii) a Basel III measure of leverage given by total exposure over Tier 1 capital iii) a risk-weighted leverage given by risk-weighted assets over Tier 1 In all cases a greater level of capitalisation (lower leverage) in t-1 leads to a lower cost of debt in t The effects are not only statistically significant but also relevant from an economic point of view A one standard deviation increase in the equity-to-total assets ratio is associated with a reduction in the average cost of funding that ranges from 2 to 4 basis points for the first two measures up to 8 basis points for the third risk-adjusted measure Results do not change if we also include in the specification a complete set of macroeconomic controls that includes bank-specific adjusted measures of GDP growth house price growth and the three-month interbank rate

The above results are in line with empirical evidence that lower capital levels are associated with higher prices for uninsured liabilities (see for example Ellis and Flannery (1992) and Flannery and Sorescu (1996)) Consistently with this earlier literature our results suggest that more equity reduces banksrsquo costs additional capital makes both equity and debt funding safer In particular Altunbas et al (2014) find that other things being equal a bank with an equity to total asset ratio larger by 1 percentage point has an expected default probability which is reduced by 04 In its pure form the argument echoes the Modigliani-Miller (1958) theorem on the irrelevance of the funding mix to the overall cost of financing Admati and Hellwig (2016) have pointed out that if the Modigliani and Miller (MM) theorem holds the return on equity (ROE) contains a risk premium that must go down if banks have more equity Thus the weighted average cost of capital remains unchanged as the leverage decreases However many other studies find that the strict version of the MM theorem does not hold (Calomiris and Hubbard 1995 Cornett and Tehranian 1994 Myers and Majluf 1984 Stein 1998)


Nevertheless even if the strict version of the MM theorem does not hold the proposition that higher equity reduces the cost of debt is a more general one The MM theorem is simply the purest form of this proposition Our results confirm that this more general statement is indeed supported by the evidence The intuition is that the reduction in debt financing cost due to the decrease in leverage exactly compensates for the higher cost of equity

Our estimates imply that the true cost of incremental equity to the overall funding mix is some way between the MM calculation and the naiumlve calculation which holds the cost of debt invariant to the bankrsquos equity

Quantitatively the last column of Table 7 suggests that a 1 percentage point increase in the equity-to-total-assets ratio is associated with approximately a 4 basis point reduction in the average cost of debt funding Taking into account that debt funding represents around nine-tenths of total liabilities this is a substantial decrease in overall debt financing costs and mitigates any assumed cost of raising additional equity

A back-of-the-envelope calculation of the overall funding cost implied by our findings is reported in Table 8 The first panel reports the overall cost of funding for the average bank in the sample Fix the total balance sheet size at 100 dollars The

Less leveraged banks pay less for their funding Table 7

Explanatory variables Dependent variable Average cost of funding (percentage points)

(I) (II) (III) (IV) (V) (VI) (VII)

(Total assetsCommon equity) t-1 00010 00012

(00003) (00003)

(Total exposureTIER 1) t-1 00080 00073

(00048) (00032)

(RWATIER1) t-1 00218 00199

(00110) (00082)

((EquityTotal assets)100) t-1 ndash0042

(00148)

Lagged dependent variable yes yes yes yes yes yes yes

Bank fixed effects yes yes yes yes yes yes yes

Bank specific characteristics (1) yes yes yes yes yes yes yes

Time fixed effects yes yes yes yes yes yes yes

Macroeconomic controls (2) no no no yes yes yes yes

Observations 1587 1331 1442 1587 1331 1442 1587

Serial correlation test (3) 0779 0180 0341 0989 0092 0739 0382

Hansen Test (4) 0174 0479 0134 0325 0180 0940 0129

Note The sample includes annual data of 105 international banks operating in 14 advanced economies over the period 1995-2012 Standard errors in parentheses The model is estimated using the dynamic Generalised Method of Moments (GMM) panel methodology plt001 plt005 plt01 (1) Bank specific characteristics include ROA asset risk short tern funding ratio diversification ratio rescue dummy and IFRS dummy (2) Macroeconomic controls include GDP growth and stock market growth These variables are weighted according the location of banksrsquo ultimate borrowers (3) Reports p-values for the null hypothesis that the errors in the first difference regression exhibit no second-order serial correlation (4) Reports p-values for the null hypothesis that the instruments used are not correlated with the residuals


liability of this bank consists of 864 of debt funding 56 of equity and 80 of technical reserves and non-interest bearing liabilities Further suppose that the cost of debt funding is set to the average cost over the sample period (310) and that the cost of equity can be approximated by the average ROE (10 )12 Then the overall cost of funding for the average bank is given by 324

Now consider how the overall cost of funding changes for a bank if the funding mix is modified so that there is a 1 percentage point increase in equity offset by a 1 percentage point decrease in debt funding (see the second panel of Table 7) Other non-interest bearing liabilities are fixed at 8 in this calculation

The third panel of Table 8 takes into account the decrease in the cost of debt funding as reported in column VII of Table 7 Given the 4 basis point decline in debt funding cost the funding cost of debt is reduced to 306 Taking into account the decline in the cost of debt the overall change in the cost of funding is only 3 basis points

As small as this estimate of 3 basis points is there are reasons to believe that even this modest number is an overestimate as we have assumed for simplicity that the cost of equity funding remains fixed at 10 even as the funding mix shifts toward equity Overall the conclusion based on our sample is that a shift in the funding mix toward equity results in an overall change in the funding cost of the bank that is small and possibly even negligibly small

12 This last assumption is often adopted in the literature to quantify the cost of equity (see King (2010))

Effect of a 1 percentage point increase in the equity to total asset ratio on the cost of funding Table 8

Average bank in the sample

Bank with 1 pp more equity and 1 pp less debt funding (Naiumlve calculation for cost of

debt funding)

Bank with 1 pp more equity and 1 pp less debt funding

(our calculation for debt funding)

Liabilities Cost () (2) Liabilities Cost () (2) Liabilities Cost () (2) (3)

Debt funding 864 310 854 310 854 306

Equity 56 100 66 100 66 100

Non-interest bearing liabilities (1) 80 00 80 00 80 00

Total liabilities 1000 324 1000 331 1000 327

Increase in costs with respect to average bank

007 003

Note (1) Non-interest bearing liabilities include fair value portion of debt credit impairment reserves reserves for pensions current and deferred tax liabilities discontinued operations and insurance liabilities - (2) The cost of debt funding is calculated as total interest expenses over total debt funding The cost of equity is approximated by the ROE Both costs are calculates as an average over the sample period (3) The cost of debt funding is reduced by 4 basis points based on the evidence reported in column VII of Table 7


44 Do less leveraged banks get more funding

The results described above indicate that well-capitalised banks pay less for their funding but it remains to be verified that they also get more funding In particular we estimate the following regression

1 1

1

ln(funds) ln(funds)

ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(4)

where ln(funds)ijt indicates the annual growth rate of debt funding The model is

specified in growth rates to avoid the problem of spurious correlations as the level of funding is non-stationary

Results are presented in the first three columns of Table 9 which report also in this case ndash one at a time ndash the three different accounting measures for leverage Even in this case the effects are statistically significant and the effects are particularly sizeable A one standard deviation decrease in leverage determines an increase in the average annual rate of debt funding between 16 and 23 depending on the different definitions Results do not change if we also include in the specification a complete set of macroeconomic controls (see columns IV to VI) All in all these results indicate that a larger capital base reduces the financing constraints faced by the bank lowering not only the cost of debt funding but also allowing banks to raise more debt Our results are in line with those of Kishan and Opiela (2000) and Admati et al (2010) which indicate that since higher capital reduces bank risk and creates a buffer against losses it makes funding with non-insured debt less information-sensitive

Less leveraged banks get more funding Table 9

Dependent variable Growth rate of debt funding

Explanatory variables (I) (II) (III) (IV) (V) (VI)

(Total assetsCommon equity) t-1 ndash01562 ndash01576

(00594) (00600)

(Total exposureTIER 1) t-1 ndash01494 ndash0153

(00406) (00392)

(RWATIER1) t-1 ndash05427 ndash04678

(02058) (02063)

Lagged dependent variable yes yes yes yes yes yes

Bank fixed effects yes yes yes yes yes yes

Time fixed effects yes yes yes yes yes yes

Macroeconomic controls (1) no no no yes yes yes

Observations 1587 1331 1442 1587 1331 1442

Serial correlation test (2) 0580 0668 0152 0563 0575 0150

Hansen Test (3) 0205 0207 0108 0132 0187 0111

Note The sample includes annual data of 105 international banks operating in 14 advanced economies over the period 1995-2012 Standard errors in parentheses The model is estimated using the dynamic Generalised Method of Moments (GMM) panel methodology We include in all specifications also a rescue dummy and IFRS dummy plt001 plt005 plt01 (1) Macroeconomic controls include GDP growth and stock market growth These variables are weighted according the location of banksrsquo ultimate borrowers (2) Reports p-values for the null hypothesis that the errors in the first difference regression exhibit no second-order serial correlation (3) Reports p-values for the null hypothesis that the instruments used are not correlated with the residuals


45 Do less leveraged banks supply more credit

The next step of the analysis investigates whether the positive effects of capitalisation on funding are then translated into higher lending to the wider economy We estimate a dynamic GMM regression of the following type

1 1

1

ln ( lo a n s ) ln ( lo a n s )

i j t i t i j t i j t

i j t i j t i j t

L e v e r a g e

X IF R S

(5)

where ln(loans)ijt indicates the annual growth rate of lending to the non-financial

sector (firms and households) Results are presented in the first three columns of Table 10 which report also in this case ndash one at a time ndash the three different accounting measures for leverage Even in this case the effects are not only statistically significant but also relevant from an economic point of view The gains are particularly sizeable and do not differ too much across leverage measures A one standard deviation decrease in the different definitions of leverage determines an increase in the average annual growth rate of between 16 and 18 Results do not change if we also include in the specification a complete set of macroeconomic controls (see columns IV to VI) Using a different definition of the leverage for comparison with other studies the last column of Table 10 suggests that a 1 percentage point increase in the equity-to-total-assets ratio is associated with a 06 percentage point increase in total lending

Less leveraged banks supply more lending Table 10

Explanatory variables

Dependent variable Growth rate of lending


(Total assetsCommon equity)t-1 ndash01203 ndash01065

(00458) (00550)


(00474) (00337)


(01097) (01566)

((EquityTotal assets)100) t-1 05997

(01734)





Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (3) 0310 0320 0815 0401 0526 0814 0419

Note The sample includes annual data of 105 international banks operating in 14 advanced economies over the period 1995-2012 Standard errors in parentheses The model is estimated using the dynamic Generalised Method of Moments (GMM) panel methodology We include in all specifications also rescue dummy and IFRS dummy plt001 plt005 plt01 (1) Macroeconomic controls include GDP growth house price growth and three-month interbank rate The first two variables are weighted according the location of banksrsquo ultimate borrowersthe interbank rate is a weighted average across the jurisdictions in which each bank gets funding (2) Reports p-values for the null hypothesis that the errors in the first difference regression exhibit no second-order serial correlation (3) Reports p-values for the null hypothesis that the instruments used are not correlated with the residuals


growth These results indicate that a larger capital base reduces the financing constraint faced by the banks allowing them to supply more loans to the economy Our finding are also in line with Berger and Bouwman (2013) who show that capital helps banks to improve their probability of survival and increase their market share during a banking crisis

46 Is it a simple rebalancing effect

The results in Tables 9 and 10 could be due to the fact that banks readjust their leverage ratio towards an optimal target In our models the fixed effect or within estimator implies a transformation of variables to deviations from the mean level This means that a value of equity growth below the bankrsquos mean implies that the bank could be overcapitalised (with respect to its target) and vice versa Hence to get back to target the bank could lower its equity andor increase its assets In Table 10 we find that the bank does indeed expand its size by having a larger loan growth (compared to its mean) if leverage is low (compared to the meantarget) This expansion on the asset side is accomplished through the use of debt funding (Table 9) It remains to verify that such effects are not due simply to a simple rebalancing mechanism toward a constant target leverage level We estimate the following equation using changes of ln(equity) as the left-hand side variable

1 1

1

ln (e q u ity) ln (e q u ity)

ij t i t ij t ij t

ij t i jt i jt

L eve ra g e

X IF R S

(6)

Automatic rebalancing toward a constant leverage target would imply that equity growth rates should be higher for highly leveraged banks (when controlling for bank fixed effects) hence an opposite sign as in Tables 9 and 10 On the other hand if the mechanism at work is related to funding costs then an insignificant or negative sign should be found (cost of equity being higher for riskier banks) The results (not reported for the sake of brevity but available upon request) indicate that there is no significant link between leverage in t-1 and the growth of equity in t ( asymp0)

47 Market leverage vs accounting leverage

As discussed in Section 3 the market values of assets and equity tend to be more volatile than book values and one may ask whether a market measure of leverage could have a different impact (with respect to an accounting measure) on the cost and quantity of bank funding and on overall bank lending In particular Adrian and Shin (2010) suggest that fair value accounting plays an important role in the procyclicality of leverage while Amel-Zahed et al (2014) take the opposite view In particular they claim that if assets are valued at current market prices and liabilities are booked at face values then accounting equity will be subject to large fluctuations In the extreme ie when the majority of assets are marked-to-market and liabilities are recorded at book values then the leverage ratio would tend to decrease during booms when asset prices increase

Adrian and Shin (2014) explain the different interpretation between the two notions of leverage Book leverage defined as the ratio of total assets to book equity concerns how much the bank lends Instead of total assets one could use the bankrsquos enterprise value defined as the sum of the bankrsquos market capitalisation and its debt The enterprise value is the total value of the bank as reflected in the value of the various stakes on the bank The enterprise value leverage is defined as the ratio of


the enterprise value to market capitalisation We calculate the enterprise value leverage using data on 73 listed banks in our sample The first three columns of Table 11 present the results of the regressions (3)-(5) that use as the dependent variable enterprise value leverage The main finding is that such a measure is never statistically significant as opposed to the accounting measures of the leverage ratio Results do not change if we also include in the specification a complete set of macroeconomic controls (see columns IV to VI) These results are consistent with the findings in Adrian et al (2015) These findings are also consistent with the notion that enterprise value leverage is driven by the stock market discount rate rather than by the corporate finance decisions of the firms themselves This contrasts with book leverage which is pinned down by book equity which is directly in control of the firms via retained earnings and net payout

48 The effect of bank capital in the monetary transmission mechanism

The aim of this section is to discuss how bank leverage can influence the reaction of bank lending to monetary policy shocks According to the ldquobank lending channelrdquo thesis a monetary tightening affects bank lending because the drop in reservable deposits cannot be completely offset by issuing non-reservable liabilities (or liquidating some assets) Since the market for bank debt is not frictionless and non-reservable liabilities are typically not insured a ldquolemonrsquos premiumrdquo has to be paid to investors In this case bank capital has an important role because it affects banksrsquo external ratings and provides the investors with a signal about their creditworthiness

Effects of market leverage are not significant Table 11


Dependent variables

Average cost of funding

Growth rate of debt financing

Growth rate of lending




(I) (II) (III) (IV) (V) (VI)

(Market value of bank assetsmarket value of banks equity) t-1 (1)

00002 ndash00013 ndash00706 00012 ndash00004 ndash00484

(00016) (00016) (00772) (00020) (00015) (00492)





Observations 958 958 958 958 958 958


Hansen Test (4) 0862 0602 0992 0871 0514 0997

Note The sample includes annual data of 75 international banks operating in 14 advanced economies over the period 1995-2012 Standard errors in parentheses The model is estimated using the dynamic Generalised Method of Moments (GMM) panel methodology We include in all specifications also rescue dummy and IFRS dummy plt001 plt005 plt01 (1) The market value of banks equity is given by the share price multiplied by the number of shares outstanding (2) Macroeconomic controls include GDP growth house price growth and three-month interbank rate The first two variables are weighted according the location of banksrsquo ultimate borrowers the interbank rate is a weighted average across the jurisdictions in which each bank gets funding (3) Reports p-values for the null hypothesis that the errors in the first difference regression exhibit no second-order serial correlation (4) Reports p-values for the null hypothesis that the instruments used are not correlated with the residuals


The cost of non-reservable funding (ie bonds or CDs) would be higher for low-capitalised banks if they are perceived as more risky by the market Low-capitalised banks are therefore more exposed to asymmetric information problems and have less capacity to shield their credit relationships (Jayaratne and Morgan 2000 Kishan and Opiela 2000) Only if banks had the possibility to issue unlimited amounts of CDs or bonds which are not subject to reserve requirements would the ldquobank lending channelrdquo be ineffective13

The empirical specification based on Ehrmann et al (2003) and Gambacorta and Mistrulli (2004) is designed to test whether banks with different leverage ratios react differently to a monetary policy shock In particular the empirical model is given by the following equation which includes interaction terms that are the product of the leverage measure with the monetary policy indicator all bank-specific characteristics refer to t-1 to avoid an endogeneity bias (see Kashyap and Stein 1995 2000)

1 1

1 1

ln(loans) ln(loans)

ijt i t ijt ijt

it ijt ijt ijt ijt

Leverage

MP Leverage X IFRS

(7)

The interest rate taken as the monetary policy indicator is the three-month interbank rate as it represents the cost of banksrsquo refinancing As banks operate in different countries monetary policy measures are weighted averages across the jurisdictions in which each bank gets funding The use of GMM mitigates the endogeneity issue In addition other considerations suggest that the endogeneity problem may not be as serious owing to the characteristics of our sample While aggregate banking conditions could influence monetary policy the supply of loans of any given bank is less likely to affect central bank decisions In addition the fact that banks operate in several jurisdictions and need not be that large in several of them reduces this risk further For example we can presume that the conditions of the Swiss banking industry are important for macroeconomic conditions in Switzerland but that they do not influence the US economy in the same way

The results are summarised in Table 12 The first three rows of the table confirm the result of Section 56 the average effect of leverage on lending is always significant and negative in other words well-capitalised banks are less constrained by capital requirements and have more opportunities to expand their loan portfolio

The additional three rows provide an indication of the response of bank lending to a monetary policy shock depending on the level of bank leverage Testing the null hypothesis that monetary policy effects are equal among banks with different leverage ratios is identical to testing the significance of the coefficient of the interaction term between leverage and the monetary policy indicator

( 1it ijtMPLeverage ) As predicted by the ldquobank lending channelrdquo hypothesis the

effects of a monetary tightening are smaller for banks with higher capitalisation which have easier access to uninsured financing For example a 1 percent increase in the interbank rate determines a decrease in the growth rate of lending that is significantly larger (between -11 and -17) for highly leveraged banks (those in the last quartile of the distribution) with respect to low-leveraged banks (those in the first quartile of the distribution) This effect is comparable to that detected by Gambacorta and Mistrulli (2004) for a sample of Italian banks and half those in Jimenez et al (2012) for Spanish banks

13 This is the point of the Romer and Romer (1990) critique


5 Conclusions

Bank capitalisation has been central in the policy debate in the aftermath of the financial crisis While most of the attention from financial supervisors has been on solvency issues solvent banks may still refuse to lend Indeed if the banking system as a whole is weakly capitalised there may even be some apparent tension between the monetary policy imperative of unlocking bank lending (which entails expanding credit) and the supervisory objective of ensuring the soundness of individual banks (which entails cutting back credit) Nevertheless our main finding is that this tension

Lending portfolio of low leveraged banks react by less to monetary policy changes Table 12

Explanatory variables Dependent variable Growth rate of lending

(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)

(Total assetsCommon equity) t-1MPt ndash00569 ndash0061

(00339) (00274)

(Total exposureTIER 1) t-1MPt ndash00408 ndash00357

(00184) (00196)

(RWATIER1) t-1MPt ndash0244 ndash02344

(00817) (01031)





Bank-specific characteristics (2) no no no yes yes yes

Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234

Note The sample includes annual data of 105 international banks operating in 14 advanced economies over the period 1995-2012 Monetary policy measures are weighted averages across the jurisdictions in which each bank gets funding Standard errors in parentheses The modelis estimated using the dynamic Generalised Method of Moments (GMM) panel methodology plt001 plt005 plt01 (1)Macroeconomic controls include GDP growth house price growth and three-month interbank rate The first two variables are weighted according the location of banksrsquo ultimate borrowers the interbank rate is a weighted average across the jurisdictions in which each bank gets funding (2) Controls include ROA bank asset risk and rescue dummy We include in all specifications also IFRS dummy (3) Reports p-values for the null hypothesis that the errors in the first difference regression exhibit no second-order serial correlation (4) Reports p-values for the null hypothesis that the instruments used are not correlated with the residuals


is more apparent than real both the macro objective of unlocking bank lending and the supervisory objective of sound banks are better served when bank equity is high

Our focus has been on the relationship between bank capital and credit and thereby on macroeconomic conditions more broadly In a bank-level study with time and firm fixed effects we have found that higher bank capital is associated with greater lending and that the mechanism involved in this channel is the lower funding costs associated with better capitalised banks

The cost advantage of a well-capitalised bank is found to be substantial A 1 percentage point increase in the equity-to-total-assets ratio is associated with a 4 basis point reduction in the cost of debt financing This effect reduces to around one third the estimate of the cost of equity in total funding as typically calculated by the literature We also find that such a reduction in overall funding cost translates into greater bank lending A 1 percentage point increase in the equity-to-total-assets ratio is associated with 06 percentage point increase in annual credit growth

To the extent that increased credit is an essential ingredient in the transmission of monetary policy to the real economy our results shed light on the importance of bank capital for the monetary policy mandate of the central bank as well as to its mandate as the financial supervisor

References

Admati AR PM DeMarzo MF Hellwig PC Pfleiderer 2010 Fallacies irrelevant facts and myths in the discussion of capital regulation Why bank equity is not expensive Stanford GSB Research Paper 2065

Admati AR MF Hellwig 2010 The bankers new clothes Whats wrong with banking and what to do about It Princeton University Press

Adrian T HS Shin 2009 Prices and Quantities in the Monetary Policy Transmission Mechanism International Journal of Central Banking 5 (4) 131-142

Adrian T HS Shin 2010 Liquidity and Leverage Journal of Financial Intermediation 19 418-37

Adrian T HS Shin 2014 Procyclical leverage and value-at-risk Review of Financial Studies 27(2) 373ndash403

Adrian T E Moench HS Shin 2014 Dynamic leverage asset pricing Federal Reserve Bank of New York staff report 625

Adrian T N Boyarchenko H Shin 2015 The cyclicality of leverage and uncertainty mimeo

Altunbas Y L Gambacorta D Marqueacutes 2014 Does Monetary Policy Affect Bank Risk International Journal of Central Banking 10 (1) 95-135

Amel-Zadeh A ME Barth WR Landsman 2014 Procyclical Leverage Bank Regulation or Fair Value Accounting Rock Center for Corporate Governance Working Paper 147

Arellano M Bond SR 1991 Some Tests of Specification for Panel Data Monte Carlo Evidence and an Application to Employment Equations The Review of Economic Studies 58 277-297


Ayuso J D Peacuterez J Saurina 2004 Are capital buffers pro-cyclical Evidence from Spanish panel data Journal of Financial Intermediation 13 249ndash64

Barth JR G Caprio Jr R Levine 2004 Banking regulation and supervision what works best Journal of Financial Intermediation 13 205-248

Basel Committee on Banking Supervision 1988 International convergence of capital measurement and capital standards July wwwbisorgpublbcbs04apdf

Basel Committee on Banking Supervision 2005 International convergence of capital measurement and capital standards A revised framework November wwwbisorgpublbcbs118apdf

Basel Committee on Banking Supervision 2014 Basel III leverage ratio framework and disclosure requirements December wwwbisorgpublbcbs270pdf

Berger Allen N Christa HS Bouwman 2013 How does capital affect bank performance during financial crises Journal of Financial Economics 109(1) 146ndash176

Berger A R DeYoung M J Flannery D Lee Ouml Oumlztekin 2008 How Do Large Banking Organizations Manage Their Capital Ratios Journal of Financial Services Research 34(2) 123-149

Blum J M Hellwig 1995 The macroeconomic implications of capital adequacy requirements for banks European Economic Review 39 739-749

Bolton P X Freixas 2006 Corporate Finance and the Monetary Transmission Mechanism Review of Financial Studies 3 829-870

Bolton P X Freixas L Gambacorta PE Mistrulli 2016 Relationship and Transaction Lending in a Crisis Review of Financial Studies forthcoming

Boot A 2000 Relationship Banking What Do We Know Journal of Financial Intermediation 9 7-25

Brei M L Gambacorta 2016 Are bank capital ratios pro-cyclical New evidence and perspectives Economic Policy forthcoming

Calomiris C W Hubbard GR 1995 Internal Finance and Investment Evidence from the Undistributed Profit Tax of 1936-37 Journal of Business 68 443-482

Coeure B 2014 Monetary Policy Transmission and Bank Deleveraging The Future of Banking Summit Paris 13 March available at httpwwwecbeuropaeu

Cohen B M Scatigna 2014 Banks and capital requirements channels of adjustment BIS Working Papers 443

Cornett MM H Tehranian 1994 An Examination of Voluntary versus Involuntary Security Issuances by Commercial Banks The Impact of Capital Regulations on Common Stock Returns Journal of Financial Economics 35 99-122

Dagher J G DellrsquoAriccia L Laeven L Ratvnoski H Tong 2016 Benefits and costs of bank capital IMF Staff Discussion Note 16

De Haas R Y Korniyenko A Pivovarsky T Tsankova 2015 Taming the herd Foreign banks the Vienna Initiative and crisis transmission Journal of Financial Intermediation 24 (3) 325-55

De Jonghe O Ouml Oumlztekin 2015 Bank capital management International evidence Journal of Financial Intermediation 24(2) 154-77


De Jonghe O 2010 Back to the basics of banking A micro analysis of banking system stability Journal of Financial Intermediation 19 387-417

Demirguumlccedil-Kunt A E Detragiache 2011 Basel core principles and bank soundness Does compliance matter Journal of Financial Stability 7 179ndash190

Dewatripont M J Tirole 1994 The Prudential Regulation of Banks Cambridge Massachusetts MIT Press

Draghi M 2014 Monetary policy in a prolonged period of low inflation in ldquoMonetary Policy in a changing financial landscaperdquo Conference Proceedings 25-27 May Penha Longa Sintra Portugal

European Banking Authority 2015 2015 EU-wide transparency exercise results EBA London

Ehrmann M L Gambacorta J Martinez Pageacutes P Sevestre A Worms 2003 Financial Systems and the Role of Banks in Monetary Policy Transmission in the Euro Area in Angeloni I A Kashyap B Mojon (eds) Monetary Policy Transmission in the Euro Area Cambridge Cambridge University Press 235-269

Ellis DM MJ Flannery 1992 Risk Premia in Large CD Rates Time Series Evidence on Market Discipline Journal of Monetary Economics 30 481-502

Flannery MJ 1989 Capital Regulation and Insured Banksrsquo Choice of Individual Loan Default Risks Journal of Monetary Economics 24 235-258

Flannery MJ SM Sorescu 1996 Evidence of Market Discipline in Subordinated Debenture Yields 1983-1991 Journal of Finance 51 1347-1377

Gagnon J M Raskin J Remache B Sack 2010 Large-Scale Asset Purchases by the Federal Reserve Did They Work FRBNY Staff Reports 441

Gambacorta L PE Mistrulli 2004 Does bank capital affect lending behavior Journal of Financial Intermediation 13 436-457

Gambacorta L A van Rixtel 2013 Structural bank regulation initiatives approaches and implications BIS Working paper no 412

Gennotte G Pyle D 1991 Capital Controls and Bank Risk Journal of Banking and Finance 15 805-824

Gobbi G E Sette 2015 Relationship Lending during a Financial Crisis Journal of European Economic Association 13(3) 453-481

Gropp R F Heider 2010 The determinants of bank capital structure Review of Finance 14 587ndash622

Hellman T Murdock K Stiglitz J 2000 Liberalization Moral Hazard in Banking and Prudential Regulation Are Capital Requirement Enough American Economic Review 90 147-165

Jayaratne J Morgan DP 2000 Capital Markets Frictions and Deposit Constraints at Banks Journal of Money Credit and Banking 32 74-92

Jimeacutenez G S Ongena JL Peydroacute J Saurina 2012 Credit supply and monetary policy Identifying the bank balance-sheet channel with loan applications American Economic Review 102(5) 2301-2326

Jokipii J A Milne 2008 The cyclical behaviour of European bank capital buffers Journal of Banking and Finance 32 1440ndash51


Kashyap AK Stein JC 1995 The Impact of Monetary Policy on Bank Balance Sheets Carnegie-Rochester Conference Series on Public Policy 42 151-195

Kashyap AK Stein JC 2000 What Do a Million Observations on Banks Say about the Transmission of Monetary Policy American Economic Review 90 407-428

Kashyap A J Stein S Hanson 2010 An analysis of the impact of ldquoSubstantially heightenedrdquo capital requirements on large financial institutions Journal of Economic Perspectives 25 3-28

Kim D Santomero AM 1988 Risk in Banking and Capital Regulation Journal of Finance 43 1219-1233

King MR 2010 Mapping capital and liquidity requirements to bank lending spreads BIS Working paper series 324

Kishan R P Opiela T P 2000 Bank Size Bank Capital and the Bank Lending Channel Journal of Money Credit and Banking 32 121-141

Laux C T Rauter 2014 Procyclicality of US Bank Leverage mimeo

Lemmon M M Roberts J Zender 2008 Back to the beginning Persistence and the cross-section of corporate capital structure Journal of Finance 63(4) 1575ndash608

Longford NT 2010 Small sample inference about variance and its transformations SORT 34

Martynova N 2015 Effect of bank capital requirements on economic growth a survey DNB Working Paper 467

Michelangeli V E Sette ldquoHow does bank capital affect the supply of mortgages Evidence from a randomized experimentrdquo BIS Working Papers 2016 forthcoming

Miles D J Yang G Marcheggiano 2012 Optimal Bank Capital The Economic Journal 123 1ndash37

Milne A A Whalley 2001 Bank capital regulation and incentives for risk-taking Cass Business School Research Paper

Modigliani F M Miller 1958 The Cost of Capital Corporation Finance and the Theory of Investment American Economic Review 48 261-297

Myers SC NS Majluf 1984 Corporate Finance and Investment Decisions when Firms Have Information that Investors Do Not Have Journal of Financial Economics 13 187-221

Oumlztekin Ouml MJ Flannery 2012 Institutional determinants of capital structure adjustment speeds Journal of Financial Economics 103(1) 88-112

Pedroni P 1999 Critical Values for Cointegration Tests in Heterogeneous Panels with Multiple Regressors Oxford Bulletin of Economics and Statistics 61 653-70

Phillips PCB RH Moon 2000 Linear Regression Limit Theory for Nonstationary Panel Data Econometrica 67 1057ndash1111

Repullo R 2004 Capital requirements market power and risk-taking in banking Journal of Financial Intermediation 13 156-182

Rochet JC 1992 Capital Requirements and the Behavior of Commercial Banks European Economic Review 36 733-762


Romer CD Romer DH 1990 New Evidence on the Monetary Transmission Mechanism Brookings Papers on Economic Activity 1 149-213

Shin HS 2014 Bank capital and monetary policy transmission ECB Forum on Central Banking Monetary policy in a changing financial landscape 25-27 May 2014 Sintra

Stein J C 1998 An Adverse-Selection Model of Bank Asset and Liability Management with Implications for the Transmission of Monetary Policy RAND Journal of Economics 29 466-486

Steffen S 2014 Robustness validity and significance of the ECBrsquos asset quality review and stress test exercise Economic and Monetary Affairs Committee Study IPAECON-EDIC2014-055

Thakor AV 2005 Do Loan Commitments Cause Overlending Journal of Money Credit and Banking 37 1067-1100

Van den Heuvel S 2002 Does bank capital matter for monetary transmission Economic Policy Review Federal Reserve Bank of New York 1-7


All volumes are available on our website wwwbisorg

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557 April 2016

How Does Bank Capital Affect the Supply of Mortgages Evidence from a Randomized Experiment

Valentina Michelangeli and Enrico Sette

556 April 2016

Threat of Entry and Debt Maturity Evidence from Airlines

Gianpaolo Parise

555 March 2016

The causal effect of house prices on mortgage demand and mortgage supply evidence from Switzerland

Christoph Basten and Catherine Koch

554 March 2016

Can a Bank Run Be Stopped Government Guarantees and the Run on Continental Illinois

Mark Carlson and Jonathan Rose

553 March 2016

What drives the short-run costs of fiscal consolidation Evidence from OECD countries

Ryan Banerjee and Fabrizio Zampolli

552 March 2016

Fiscal sustainability and the financial cycle Claudio Borio Marco Lombardi and Fabrizio Zampolli

551 March 2016

When the Walk is not Random Commodity Prices and Exchange Rates

Emanuel Kohlscheen Fernando H Avalos and Andreas Schrimpf

550 March 2016

A new dimension to currency mismatches in the emerging markets non-financial companies

Michael Chui Emese Kuruc and Philip Turner

549 March 2016

Monetary policy spillovers and currency networks in cross-border bank lending

Stefan Avdjiev and Előd Takaacutets

548 March 2016

Moving in tandem bank provisioning in emerging market economies

Andres Murcia and Emanuel Kohlscheen

547 March 2016

When pegging ties your hands Intertemporal considerations in currency crises

Nikola Tarashev and Anna Zabai

546 March 2016

Financial intermediation and monetary policy transmission in EMEs What has changed post-2008 crisis

MS Mohanty and Kumar Rishabh

545 February 2016

Booms and banking crises Freacutedeacuteric Boissay Fabrice Collard and Frank Smets

544 February 2016

What drives inflation expectations in Brazil Public versus private information

Waldyr D Areosa

543 January 2016

Fiscal policy and the cycle in Latin America the role of financing conditions and fiscal rules

Enrique Alberola Ivaacuten Kataryniuk Aacutengel Melguizo and Reneacute Orozco

542 January 2016

Bank standalone credit ratings Michael R King Steven Ongena and Nikola Tarashev


Abstract

Contents

1 Introduction












5 Conclusions

References

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GrayImageMinResolutionPolicy OK DownsampleGrayImages true GrayImageDownsampleType Bicubic GrayImageResolution 150 GrayImageDepth -1 GrayImageMinDownsampleDepth 2 GrayImageDownsampleThreshold 100000 EncodeGrayImages true GrayImageFilter DCTEncode AutoFilterGrayImages true GrayImageAutoFilterStrategy JPEG GrayACSImageDict ltlt QFactor 076 HSamples [2 1 1 2] VSamples [2 1 1 2] gtgt GrayImageDict ltlt QFactor 076 HSamples [2 1 1 2] VSamples [2 1 1 2] gtgt JPEG2000GrayACSImageDict ltlt TileWidth 256 TileHeight 256 Quality 15 gtgt JPEG2000GrayImageDict ltlt TileWidth 256 TileHeight 256 Quality 15 gtgt AntiAliasMonoImages false CropMonoImages true MonoImageMinResolution 1200 MonoImageMinResolutionPolicy OK DownsampleMonoImages true MonoImageDownsampleType Bicubic MonoImageResolution 600 MonoImageDepth -1 MonoImageDownsampleThreshold 100000 EncodeMonoImages true MonoImageFilter CCITTFaxEncode MonoImageDict ltlt K -1 gtgt AllowPSXObjects false CheckCompliance [ None ] PDFX1aCheck false PDFX3Check false PDFXCompliantPDFOnly false PDFXNoTrimBoxError true PDFXTrimBoxToMediaBoxOffset [ 000000 000000 000000 000000 ] PDFXSetBleedBoxToMediaBox true PDFXBleedBoxToTrimBoxOffset [ 000000 000000 000000 000000 ] PDFXOutputIntentProfile (None) PDFXOutputConditionIdentifier () PDFXOutputCondition () PDFXRegistryName () PDFXTrapped False CreateJDFFile false Description ltlt ARA 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 BGR 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 CHS ltFEFF4f7f75288fd94e9b8bbe5b9a521b5efa7684002000410064006f006200650020005000440046002065876863900275284e8e55464e1a65876863768467e5770b548c62535370300260a853ef4ee54f7f75280020004100630072006f0062006100740020548c002000410064006f00620065002000520065006100640065007200200036002e003000204ee553ca66f49ad87248672c676562535f00521b5efa768400200050004400460020658768633002gt CHT ltFEFF4f7f752890194e9b8a2d7f6e5efa7acb7684002000410064006f006200650020005000440046002065874ef69069752865bc666e901a554652d965874ef6768467e5770b548c52175370300260a853ef4ee54f7f75280020004100630072006f0062006100740020548c002000410064006f00620065002000520065006100640065007200200036002e003000204ee553ca66f49ad87248672c4f86958b555f5df25efa7acb76840020005000440046002065874ef63002gt CZE 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 DAN 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 DEU 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 ESP ltFEFF005500740069006c0069006300650020006500730074006100200063006f006e0066006900670075007200610063006900f3006e0020007000610072006100200063007200650061007200200064006f00630075006d0065006e0074006f0073002000640065002000410064006f00620065002000500044004600200061006400650063007500610064006f007300200070006100720061002000760069007300750061006c0069007a00610063006900f3006e0020006500200069006d0070007200650073006900f3006e00200064006500200063006f006e006600690061006e007a006100200064006500200064006f00630075006d0065006e0074006f007300200063006f006d00650072006300690061006c00650073002e002000530065002000700075006500640065006e00200061006200720069007200200064006f00630075006d0065006e0074006f00730020005000440046002000630072006500610064006f007300200063006f006e0020004100630072006f006200610074002c002000410064006f00620065002000520065006100640065007200200036002e003000200079002000760065007200730069006f006e0065007300200070006f00730074006500720069006f007200650073002egt ETI 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 FRA 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 GRE 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 HEB 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 HRV 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 HUN 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 ITA (Utilizzare queste impostazioni per creare documenti Adobe PDF adatti per visualizzare e stampare documenti aziendali in modo affidabile I documenti PDF creati possono essere aperti con Acrobat e Adobe Reader 60 e versioni successive) JPN 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 KOR ltFEFFc7740020c124c815c7440020c0acc6a9d558c5ec0020be44c988b2c8c2a40020bb38c11cb97c0020c548c815c801c73cb85c0020bcf4ace00020c778c1c4d558b2940020b3700020ac00c7a50020c801d569d55c002000410064006f0062006500200050004400460020bb38c11cb97c0020c791c131d569b2c8b2e4002e0020c774b807ac8c0020c791c131b41c00200050004400460020bb38c11cb2940020004100630072006f0062006100740020bc0f002000410064006f00620065002000520065006100640065007200200036002e00300020c774c0c1c5d0c11c0020c5f40020c2180020c788c2b5b2c8b2e4002egt LTH 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 LVI 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 NLD (Gebruik deze instellingen om Adobe PDF-documenten te maken waarmee zakelijke documenten betrouwbaar kunnen worden weergegeven en afgedrukt De gemaakte PDF-documenten kunnen worden geopend met Acrobat en Adobe Reader 60 en hoger) NOR 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 POL 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 PTB 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 RUM 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 RUS ltFEFF04180441043F043E043B044C043704430439044204350020044D044204380020043F043004400430043C043504420440044B0020043F0440043800200441043E043704340430043D0438043800200434043E043A0443043C0435043D0442043E0432002000410064006F006200650020005000440046002C0020043F043E04340445043E0434044F04490438044500200434043B044F0020043D0430043404350436043D043E0433043E0020043F0440043E0441043C043E044204400430002004380020043F043504470430044204380020043104380437043D04350441002D0434043E043A0443043C0435043D0442043E0432002E00200421043E043704340430043D043D044B043500200434043E043A0443043C0435043D0442044B00200050004400460020043C043E0436043D043E0020043E0442043A0440044B0442044C002C002004380441043F043E043B044C04370443044F0020004100630072006F00620061007400200438002000410064006F00620065002000520065006100640065007200200036002E00300020043B04380431043E00200438044500200431043E043B043504350020043F043E04370434043D043804350020043204350440044104380438002Egt SKY 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 SLV 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 SUO 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 SVE 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 TUR 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 UKR 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 ENU (Use these settings to create Adobe PDF documents suitable for reliable viewing and printing of business documents Created PDF documents can be opened with Acrobat and Adobe Reader 60 and later) gtgtgtgt setdistillerparamsltlt HWResolution [600 600] PageSize [595276 841890]gtgt setpagedevice

BIS Working Papers are written by members of the Monetary and Economic Department of the Bank for International Settlements and from time to time by other economists and are published by the Bank The papers are on subjects of topical interest and are technical in character The views expressed in them are those of their authors and not necessarily the views of the BIS

This publication is available on the BIS website (wwwbisorg)

copy Bank for International Settlements 2016 All rights reserved Brief excerpts may be reproduced or translated provided the source is stated

ISSN 1020-0959 (print) ISSN 1682-7678 (online)




Abstract







Contents

Abstract i

1 Introduction 1












5 Conclusions 22

References 23


1 Introduction
















1

2

3

4

5

6

10 20 30 40 50 60 70

y = 2457 + 0033x (020) (001)

Total assetsEquity

Cos

t of n

on-e

quity

fund

ing

R2 = 016

ndash7

0

7

14

21

10 20 30 40 50 60 70

y = 11092 - 0112x (082) (003)R2 = 012

Total assetsEquity

Gro

wth

of n

on-e

quity

fund

ing

ndash7

0

7

14

21

10 20 30 40 50 60 70

y = 10744 - 0138x (093) (003)R2 = 014

Total assetsEquity

Gro

wth

of l

endi

ng


































No of MampA


Austria 610 702 298 5 5 5

Australia 3073 742 258 7 4 0

Belgium 1169 579 421 3 7 3

Canada 3402 686 314 6 3 0

Switzerland 2569 370 630 5 5 1

Germany 5169 775 225 13 3 2

Spain 3542 674 326 14 14 2

France 8731 723 277 6 13 5

Italy 3177 808 192 12 35 6

Japan 3555 828 172 5 7 0

Netherlands 993 604 396 1 0 0

Sweden 1921 583 417 4 5 1

United Kingdom 10730 627 373 7 15 3

United States 10273 738 262 17 39 14

Sumaverage 58914 674 326 105 155 42












0

8

16

24

32

96 98 00 02 04 06 08 10 12


16

20

24

28

32

96 98 00 02 04 06 08 10 12

6

8

10

12

14

96 98 00 02 04 06 08 10 12

0

10

20

30

40

96 98 00 02 04 06 08 10 12












Region

Total assets

Equity ()

Total exposureTI

ER 1 ()

Risk weighted

assetsTIER 1 ()

Market value

assets market value

equity ()


()


()

Three-month

interbank rate

adjusted ()


USD)

Number of banks

Asia-Pacific 243 226 123 147 247 269 373 6628 12

Euro Area 270 276 121 239 170 613 319 19967 54

Other Europe 246 334 111 166 227 704 345 14620 16

North America 154 222 105 94 229 633 325 13675 23

Averagesum 228 265 115 161 218 555 340 54890 105




Low leveraged banks





Assets (bil USD) 2687 6768 -4081 4026




Asset Risk 402 5 -10 482

ROA 095 019 076 058

















1587 23553 14786 5033 174116






958 15957 13955 3048 99152





1587 0395 0489 0000 1000

Macro controls(1)





Other controls







































(IV)

Ln(Common Equity) 09986 09908 08470 06641

(00092) (00083) (00094) (00176)






Observations 1587 1587 1587 1587

R-squared 08785 09046 09795 09829









1

1

( ) ( ) ( )


t it t ijt ijt ijt


C Y C X IFRS

(2rsquo)













(03405) (11160) (02540) (06021)


(12893) (07264)


(00810) (00431) (00259) (00310)


(00682) (00544)




Observations 1587 1587 1587 1587 1278 1278 1278 1278


Hansen Test (4) 0174 0156 0119 0117 0567 0591 0529 0572




1 1

1


ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(3)















(00003) (00003)


(00048) (00032)

(RWATIER1) t-1 00218 00199

(00110) (00082)


(00148)






Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (4) 0174 0479 0134 0325 0180 0940 0129











debt funding)




Debt funding 864 310 854 310 854 306

Equity 56 100 66 100 66 100




007 003





1 1

1

ln(funds) ln(funds)

ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(4)








(00594) (00600)


(00406) (00392)


(02058) (02063)





Observations 1587 1331 1442 1587 1331 1442


Hansen Test (3) 0205 0207 0108 0132 0187 0111





1 1

1



i j t i j t i j t

L e v e r a g e

X IF R S

(5)








(00458) (00550)


(00474) (00337)


(01097) (01566)


(01734)





Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (3) 0310 0320 0815 0401 0526 0814 0419






1 1

1


ij t i t ij t ij t

ij t i jt i jt

L eve ra g e

X IF R S

(6)











Dependent variables







(I) (II) (III) (IV) (V) (VI)



(00016) (00016) (00772) (00020) (00015) (00492)





Observations 958 958 958 958 958 958


Hansen Test (4) 0862 0602 0992 0871 0514 0997





1 1

1 1

ln(loans) ln(loans)

ijt i t ijt ijt

it ijt ijt ijt ijt

Leverage

MP Leverage X IFRS

(7)








5 Conclusions




(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)


(00339) (00274)


(00184) (00196)


(00817) (01031)






Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References

ltlt ASCII85EncodePages false AllowTransparency false AutoPositionEPSFiles true AutoRotatePages PageByPage Binding Left CalGrayProfile (Gray Gamma 22) CalRGBProfile (sRGB IEC61966-21) CalCMYKProfile (US Web Coated 050SWOP051 v2) sRGBProfile (sRGB IEC61966-21) CannotEmbedFontPolicy Warning CompatibilityLevel 16 CompressObjects Tags CompressPages true ConvertImagesToIndexed true PassThroughJPEGImages false CreateJobTicket false DefaultRenderingIntent Default DetectBlends true DetectCurves 01000 ColorConversionStrategy LeaveColorUnchanged DoThumbnails false EmbedAllFonts true EmbedOpenType false ParseICCProfilesInComments true EmbedJobOptions true DSCReportingLevel 0 EmitDSCWarnings false EndPage -1 ImageMemory 1048576 LockDistillerParams true MaxSubsetPct 100 Optimize true OPM 1 ParseDSCComments true ParseDSCCommentsForDocInfo false PreserveCopyPage false PreserveDICMYKValues true PreserveEPSInfo false PreserveFlatness true PreserveHalftoneInfo false PreserveOPIComments false PreserveOverprintSettings true StartPage 1 SubsetFonts true TransferFunctionInfo Apply UCRandBGInfo Remove UsePrologue false ColorSettingsFile () AlwaysEmbed [ true SymbolMT Wingdings-Regular ] NeverEmbed [ true ] AntiAliasColorImages false CropColorImages true ColorImageMinResolution 150 ColorImageMinResolutionPolicy OK DownsampleColorImages true ColorImageDownsampleType Bicubic ColorImageResolution 150 ColorImageDepth -1 ColorImageMinDownsampleDepth 1 ColorImageDownsampleThreshold 100000 EncodeColorImages true ColorImageFilter DCTEncode AutoFilterColorImages true ColorImageAutoFilterStrategy JPEG ColorACSImageDict ltlt QFactor 076 HSamples [2 1 1 2] VSamples [2 1 1 2] gtgt ColorImageDict ltlt QFactor 076 HSamples [2 1 1 2] VSamples [2 1 1 2] gtgt JPEG2000ColorACSImageDict ltlt TileWidth 256 TileHeight 256 Quality 15 gtgt JPEG2000ColorImageDict ltlt TileWidth 256 TileHeight 256 Quality 15 gtgt AntiAliasGrayImages false CropGrayImages true GrayImageMinResolution 150 GrayImageMinResolutionPolicy OK DownsampleGrayImages true GrayImageDownsampleType Bicubic GrayImageResolution 150 GrayImageDepth -1 GrayImageMinDownsampleDepth 2 GrayImageDownsampleThreshold 100000 EncodeGrayImages true GrayImageFilter DCTEncode AutoFilterGrayImages true GrayImageAutoFilterStrategy JPEG GrayACSImageDict ltlt QFactor 076 HSamples [2 1 1 2] VSamples [2 1 1 2] gtgt GrayImageDict ltlt QFactor 076 HSamples [2 1 1 2] VSamples [2 1 1 2] gtgt JPEG2000GrayACSImageDict ltlt TileWidth 256 TileHeight 256 Quality 15 gtgt JPEG2000GrayImageDict ltlt TileWidth 256 TileHeight 256 Quality 15 gtgt AntiAliasMonoImages false CropMonoImages true MonoImageMinResolution 1200 MonoImageMinResolutionPolicy OK DownsampleMonoImages true MonoImageDownsampleType Bicubic MonoImageResolution 600 MonoImageDepth -1 MonoImageDownsampleThreshold 100000 EncodeMonoImages true MonoImageFilter CCITTFaxEncode MonoImageDict ltlt K -1 gtgt AllowPSXObjects false CheckCompliance [ None ] PDFX1aCheck false PDFX3Check false PDFXCompliantPDFOnly false PDFXNoTrimBoxError true PDFXTrimBoxToMediaBoxOffset [ 000000 000000 000000 000000 ] PDFXSetBleedBoxToMediaBox true PDFXBleedBoxToTrimBoxOffset [ 000000 000000 000000 000000 ] PDFXOutputIntentProfile (None) PDFXOutputConditionIdentifier () PDFXOutputCondition () PDFXRegistryName () PDFXTrapped False CreateJDFFile false Description ltlt ARA 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 BGR ltFEFF04180437043F043E043B043704320430043904420435002004420435043704380020043D0430044104420440043E0439043A0438002C00200437043000200434043000200441044A0437043404300432043004420435002000410064006F00620065002000500044004600200434043E043A0443043C0435043D04420438002C0020043F043E04340445043E0434044F044904380020043704300020043D04300434043504360434043D043E00200440043004370433043B0435043604340430043D0435002004380020043F04350447043004420430043D04350020043D04300020043104380437043D0435044100200434043E043A0443043C0435043D04420438002E00200421044A04370434043004340435043D043804420435002000500044004600200434043E043A0443043C0435043D044204380020043C043E0433043004420020043404300020044104350020043E0442043204300440044F0442002004410020004100630072006F00620061007400200438002000410064006F00620065002000520065006100640065007200200036002E0030002004380020043F043E002D043D043E043204380020043204350440044104380438002Egt CHS ltFEFF4f7f75288fd94e9b8bbe5b9a521b5efa7684002000410064006f006200650020005000440046002065876863900275284e8e55464e1a65876863768467e5770b548c62535370300260a853ef4ee54f7f75280020004100630072006f0062006100740020548c002000410064006f00620065002000520065006100640065007200200036002e003000204ee553ca66f49ad87248672c676562535f00521b5efa768400200050004400460020658768633002gt CHT ltFEFF4f7f752890194e9b8a2d7f6e5efa7acb7684002000410064006f006200650020005000440046002065874ef69069752865bc666e901a554652d965874ef6768467e5770b548c52175370300260a853ef4ee54f7f75280020004100630072006f0062006100740020548c002000410064006f00620065002000520065006100640065007200200036002e003000204ee553ca66f49ad87248672c4f86958b555f5df25efa7acb76840020005000440046002065874ef63002gt CZE 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 DAN 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 DEU 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 ESP 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 ETI 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 FRA 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 GRE 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 HEB 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 HRV 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 HUN 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 ITA (Utilizzare queste impostazioni per creare documenti Adobe PDF adatti per visualizzare e stampare documenti aziendali in modo affidabile I documenti PDF creati possono essere aperti con Acrobat e Adobe Reader 60 e versioni successive) JPN 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 KOR ltFEFFc7740020c124c815c7440020c0acc6a9d558c5ec0020be44c988b2c8c2a40020bb38c11cb97c0020c548c815c801c73cb85c0020bcf4ace00020c778c1c4d558b2940020b3700020ac00c7a50020c801d569d55c002000410064006f0062006500200050004400460020bb38c11cb97c0020c791c131d569b2c8b2e4002e0020c774b807ac8c0020c791c131b41c00200050004400460020bb38c11cb2940020004100630072006f0062006100740020bc0f002000410064006f00620065002000520065006100640065007200200036002e00300020c774c0c1c5d0c11c0020c5f40020c2180020c788c2b5b2c8b2e4002egt LTH 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 LVI 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 NLD (Gebruik deze instellingen om Adobe PDF-documenten te maken waarmee zakelijke documenten betrouwbaar kunnen worden weergegeven en afgedrukt De gemaakte PDF-documenten kunnen worden geopend met Acrobat en Adobe Reader 60 en hoger) NOR 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 POL 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 PTB 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 RUM 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 RUS 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 SKY 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 SLV 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 SUO 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 SVE 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 TUR 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 UKR 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 ENU (Use these settings to create Adobe PDF documents suitable for reliable viewing and printing of business documents Created PDF documents can be opened with Acrobat and Adobe Reader 60 and later) gtgtgtgt setdistillerparamsltlt HWResolution [600 600] PageSize [595276 841890]gtgt setpagedevice




Abstract







Contents

Abstract i

1 Introduction 1












5 Conclusions 22

References 23


1 Introduction
















1

2

3

4

5

6

10 20 30 40 50 60 70

y = 2457 + 0033x (020) (001)

Total assetsEquity

Cos

t of n

on-e

quity

fund

ing

R2 = 016

ndash7

0

7

14

21

10 20 30 40 50 60 70

y = 11092 - 0112x (082) (003)R2 = 012

Total assetsEquity

Gro

wth

of n

on-e

quity

fund

ing

ndash7

0

7

14

21

10 20 30 40 50 60 70

y = 10744 - 0138x (093) (003)R2 = 014

Total assetsEquity

Gro

wth

of l

endi

ng


































No of MampA


Austria 610 702 298 5 5 5

Australia 3073 742 258 7 4 0

Belgium 1169 579 421 3 7 3

Canada 3402 686 314 6 3 0

Switzerland 2569 370 630 5 5 1

Germany 5169 775 225 13 3 2

Spain 3542 674 326 14 14 2

France 8731 723 277 6 13 5

Italy 3177 808 192 12 35 6

Japan 3555 828 172 5 7 0

Netherlands 993 604 396 1 0 0

Sweden 1921 583 417 4 5 1

United Kingdom 10730 627 373 7 15 3

United States 10273 738 262 17 39 14

Sumaverage 58914 674 326 105 155 42












0

8

16

24

32

96 98 00 02 04 06 08 10 12


16

20

24

28

32

96 98 00 02 04 06 08 10 12

6

8

10

12

14

96 98 00 02 04 06 08 10 12

0

10

20

30

40

96 98 00 02 04 06 08 10 12












Region

Total assets

Equity ()

Total exposureTI

ER 1 ()

Risk weighted

assetsTIER 1 ()

Market value

assets market value

equity ()


()


()

Three-month

interbank rate

adjusted ()


USD)

Number of banks

Asia-Pacific 243 226 123 147 247 269 373 6628 12

Euro Area 270 276 121 239 170 613 319 19967 54

Other Europe 246 334 111 166 227 704 345 14620 16

North America 154 222 105 94 229 633 325 13675 23

Averagesum 228 265 115 161 218 555 340 54890 105




Low leveraged banks





Assets (bil USD) 2687 6768 -4081 4026




Asset Risk 402 5 -10 482

ROA 095 019 076 058

















1587 23553 14786 5033 174116






958 15957 13955 3048 99152





1587 0395 0489 0000 1000

Macro controls(1)





Other controls







































(IV)

Ln(Common Equity) 09986 09908 08470 06641

(00092) (00083) (00094) (00176)






Observations 1587 1587 1587 1587

R-squared 08785 09046 09795 09829









1

1

( ) ( ) ( )


t it t ijt ijt ijt


C Y C X IFRS

(2rsquo)













(03405) (11160) (02540) (06021)


(12893) (07264)


(00810) (00431) (00259) (00310)


(00682) (00544)




Observations 1587 1587 1587 1587 1278 1278 1278 1278


Hansen Test (4) 0174 0156 0119 0117 0567 0591 0529 0572




1 1

1


ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(3)















(00003) (00003)


(00048) (00032)

(RWATIER1) t-1 00218 00199

(00110) (00082)


(00148)






Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (4) 0174 0479 0134 0325 0180 0940 0129











debt funding)




Debt funding 864 310 854 310 854 306

Equity 56 100 66 100 66 100




007 003





1 1

1

ln(funds) ln(funds)

ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(4)








(00594) (00600)


(00406) (00392)


(02058) (02063)





Observations 1587 1331 1442 1587 1331 1442


Hansen Test (3) 0205 0207 0108 0132 0187 0111





1 1

1



i j t i j t i j t

L e v e r a g e

X IF R S

(5)








(00458) (00550)


(00474) (00337)


(01097) (01566)


(01734)





Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (3) 0310 0320 0815 0401 0526 0814 0419






1 1

1


ij t i t ij t ij t

ij t i jt i jt

L eve ra g e

X IF R S

(6)











Dependent variables







(I) (II) (III) (IV) (V) (VI)



(00016) (00016) (00772) (00020) (00015) (00492)





Observations 958 958 958 958 958 958


Hansen Test (4) 0862 0602 0992 0871 0514 0997





1 1

1 1

ln(loans) ln(loans)

ijt i t ijt ijt

it ijt ijt ijt ijt

Leverage

MP Leverage X IFRS

(7)








5 Conclusions




(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)


(00339) (00274)


(00184) (00196)


(00817) (01031)






Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References



Contents

Abstract i

1 Introduction 1












5 Conclusions 22

References 23


1 Introduction
















1

2

3

4

5

6

10 20 30 40 50 60 70

y = 2457 + 0033x (020) (001)

Total assetsEquity

Cos

t of n

on-e

quity

fund

ing

R2 = 016

ndash7

0

7

14

21

10 20 30 40 50 60 70

y = 11092 - 0112x (082) (003)R2 = 012

Total assetsEquity

Gro

wth

of n

on-e

quity

fund

ing

ndash7

0

7

14

21

10 20 30 40 50 60 70

y = 10744 - 0138x (093) (003)R2 = 014

Total assetsEquity

Gro

wth

of l

endi

ng


































No of MampA


Austria 610 702 298 5 5 5

Australia 3073 742 258 7 4 0

Belgium 1169 579 421 3 7 3

Canada 3402 686 314 6 3 0

Switzerland 2569 370 630 5 5 1

Germany 5169 775 225 13 3 2

Spain 3542 674 326 14 14 2

France 8731 723 277 6 13 5

Italy 3177 808 192 12 35 6

Japan 3555 828 172 5 7 0

Netherlands 993 604 396 1 0 0

Sweden 1921 583 417 4 5 1

United Kingdom 10730 627 373 7 15 3

United States 10273 738 262 17 39 14

Sumaverage 58914 674 326 105 155 42












0

8

16

24

32

96 98 00 02 04 06 08 10 12


16

20

24

28

32

96 98 00 02 04 06 08 10 12

6

8

10

12

14

96 98 00 02 04 06 08 10 12

0

10

20

30

40

96 98 00 02 04 06 08 10 12












Region

Total assets

Equity ()

Total exposureTI

ER 1 ()

Risk weighted

assetsTIER 1 ()

Market value

assets market value

equity ()


()


()

Three-month

interbank rate

adjusted ()


USD)

Number of banks

Asia-Pacific 243 226 123 147 247 269 373 6628 12

Euro Area 270 276 121 239 170 613 319 19967 54

Other Europe 246 334 111 166 227 704 345 14620 16

North America 154 222 105 94 229 633 325 13675 23

Averagesum 228 265 115 161 218 555 340 54890 105




Low leveraged banks





Assets (bil USD) 2687 6768 -4081 4026




Asset Risk 402 5 -10 482

ROA 095 019 076 058

















1587 23553 14786 5033 174116






958 15957 13955 3048 99152





1587 0395 0489 0000 1000

Macro controls(1)





Other controls







































(IV)

Ln(Common Equity) 09986 09908 08470 06641

(00092) (00083) (00094) (00176)






Observations 1587 1587 1587 1587

R-squared 08785 09046 09795 09829









1

1

( ) ( ) ( )


t it t ijt ijt ijt


C Y C X IFRS

(2rsquo)













(03405) (11160) (02540) (06021)


(12893) (07264)


(00810) (00431) (00259) (00310)


(00682) (00544)




Observations 1587 1587 1587 1587 1278 1278 1278 1278


Hansen Test (4) 0174 0156 0119 0117 0567 0591 0529 0572




1 1

1


ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(3)















(00003) (00003)


(00048) (00032)

(RWATIER1) t-1 00218 00199

(00110) (00082)


(00148)






Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (4) 0174 0479 0134 0325 0180 0940 0129











debt funding)




Debt funding 864 310 854 310 854 306

Equity 56 100 66 100 66 100




007 003





1 1

1

ln(funds) ln(funds)

ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(4)








(00594) (00600)


(00406) (00392)


(02058) (02063)





Observations 1587 1331 1442 1587 1331 1442


Hansen Test (3) 0205 0207 0108 0132 0187 0111





1 1

1



i j t i j t i j t

L e v e r a g e

X IF R S

(5)








(00458) (00550)


(00474) (00337)


(01097) (01566)


(01734)





Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (3) 0310 0320 0815 0401 0526 0814 0419






1 1

1


ij t i t ij t ij t

ij t i jt i jt

L eve ra g e

X IF R S

(6)











Dependent variables







(I) (II) (III) (IV) (V) (VI)



(00016) (00016) (00772) (00020) (00015) (00492)





Observations 958 958 958 958 958 958


Hansen Test (4) 0862 0602 0992 0871 0514 0997





1 1

1 1

ln(loans) ln(loans)

ijt i t ijt ijt

it ijt ijt ijt ijt

Leverage

MP Leverage X IFRS

(7)








5 Conclusions




(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)


(00339) (00274)


(00184) (00196)


(00817) (01031)






Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References



1 Introduction
















1

2

3

4

5

6

10 20 30 40 50 60 70

y = 2457 + 0033x (020) (001)

Total assetsEquity

Cos

t of n

on-e

quity

fund

ing

R2 = 016

ndash7

0

7

14

21

10 20 30 40 50 60 70

y = 11092 - 0112x (082) (003)R2 = 012

Total assetsEquity

Gro

wth

of n

on-e

quity

fund

ing

ndash7

0

7

14

21

10 20 30 40 50 60 70

y = 10744 - 0138x (093) (003)R2 = 014

Total assetsEquity

Gro

wth

of l

endi

ng


































No of MampA


Austria 610 702 298 5 5 5

Australia 3073 742 258 7 4 0

Belgium 1169 579 421 3 7 3

Canada 3402 686 314 6 3 0

Switzerland 2569 370 630 5 5 1

Germany 5169 775 225 13 3 2

Spain 3542 674 326 14 14 2

France 8731 723 277 6 13 5

Italy 3177 808 192 12 35 6

Japan 3555 828 172 5 7 0

Netherlands 993 604 396 1 0 0

Sweden 1921 583 417 4 5 1

United Kingdom 10730 627 373 7 15 3

United States 10273 738 262 17 39 14

Sumaverage 58914 674 326 105 155 42












0

8

16

24

32

96 98 00 02 04 06 08 10 12


16

20

24

28

32

96 98 00 02 04 06 08 10 12

6

8

10

12

14

96 98 00 02 04 06 08 10 12

0

10

20

30

40

96 98 00 02 04 06 08 10 12












Region

Total assets

Equity ()

Total exposureTI

ER 1 ()

Risk weighted

assetsTIER 1 ()

Market value

assets market value

equity ()


()


()

Three-month

interbank rate

adjusted ()


USD)

Number of banks

Asia-Pacific 243 226 123 147 247 269 373 6628 12

Euro Area 270 276 121 239 170 613 319 19967 54

Other Europe 246 334 111 166 227 704 345 14620 16

North America 154 222 105 94 229 633 325 13675 23

Averagesum 228 265 115 161 218 555 340 54890 105




Low leveraged banks





Assets (bil USD) 2687 6768 -4081 4026




Asset Risk 402 5 -10 482

ROA 095 019 076 058

















1587 23553 14786 5033 174116






958 15957 13955 3048 99152





1587 0395 0489 0000 1000

Macro controls(1)





Other controls







































(IV)

Ln(Common Equity) 09986 09908 08470 06641

(00092) (00083) (00094) (00176)






Observations 1587 1587 1587 1587

R-squared 08785 09046 09795 09829









1

1

( ) ( ) ( )


t it t ijt ijt ijt


C Y C X IFRS

(2rsquo)













(03405) (11160) (02540) (06021)


(12893) (07264)


(00810) (00431) (00259) (00310)


(00682) (00544)




Observations 1587 1587 1587 1587 1278 1278 1278 1278


Hansen Test (4) 0174 0156 0119 0117 0567 0591 0529 0572




1 1

1


ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(3)















(00003) (00003)


(00048) (00032)

(RWATIER1) t-1 00218 00199

(00110) (00082)


(00148)






Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (4) 0174 0479 0134 0325 0180 0940 0129











debt funding)




Debt funding 864 310 854 310 854 306

Equity 56 100 66 100 66 100




007 003





1 1

1

ln(funds) ln(funds)

ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(4)








(00594) (00600)


(00406) (00392)


(02058) (02063)





Observations 1587 1331 1442 1587 1331 1442


Hansen Test (3) 0205 0207 0108 0132 0187 0111





1 1

1



i j t i j t i j t

L e v e r a g e

X IF R S

(5)








(00458) (00550)


(00474) (00337)


(01097) (01566)


(01734)





Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (3) 0310 0320 0815 0401 0526 0814 0419






1 1

1


ij t i t ij t ij t

ij t i jt i jt

L eve ra g e

X IF R S

(6)











Dependent variables







(I) (II) (III) (IV) (V) (VI)



(00016) (00016) (00772) (00020) (00015) (00492)





Observations 958 958 958 958 958 958


Hansen Test (4) 0862 0602 0992 0871 0514 0997





1 1

1 1

ln(loans) ln(loans)

ijt i t ijt ijt

it ijt ijt ijt ijt

Leverage

MP Leverage X IFRS

(7)








5 Conclusions




(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)


(00339) (00274)


(00184) (00196)


(00817) (01031)






Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References












1

2

3

4

5

6

10 20 30 40 50 60 70

y = 2457 + 0033x (020) (001)

Total assetsEquity

Cos

t of n

on-e

quity

fund

ing

R2 = 016

ndash7

0

7

14

21

10 20 30 40 50 60 70

y = 11092 - 0112x (082) (003)R2 = 012

Total assetsEquity

Gro

wth

of n

on-e

quity

fund

ing

ndash7

0

7

14

21

10 20 30 40 50 60 70

y = 10744 - 0138x (093) (003)R2 = 014

Total assetsEquity

Gro

wth

of l

endi

ng


































No of MampA


Austria 610 702 298 5 5 5

Australia 3073 742 258 7 4 0

Belgium 1169 579 421 3 7 3

Canada 3402 686 314 6 3 0

Switzerland 2569 370 630 5 5 1

Germany 5169 775 225 13 3 2

Spain 3542 674 326 14 14 2

France 8731 723 277 6 13 5

Italy 3177 808 192 12 35 6

Japan 3555 828 172 5 7 0

Netherlands 993 604 396 1 0 0

Sweden 1921 583 417 4 5 1

United Kingdom 10730 627 373 7 15 3

United States 10273 738 262 17 39 14

Sumaverage 58914 674 326 105 155 42












0

8

16

24

32

96 98 00 02 04 06 08 10 12


16

20

24

28

32

96 98 00 02 04 06 08 10 12

6

8

10

12

14

96 98 00 02 04 06 08 10 12

0

10

20

30

40

96 98 00 02 04 06 08 10 12












Region

Total assets

Equity ()

Total exposureTI

ER 1 ()

Risk weighted

assetsTIER 1 ()

Market value

assets market value

equity ()


()


()

Three-month

interbank rate

adjusted ()


USD)

Number of banks

Asia-Pacific 243 226 123 147 247 269 373 6628 12

Euro Area 270 276 121 239 170 613 319 19967 54

Other Europe 246 334 111 166 227 704 345 14620 16

North America 154 222 105 94 229 633 325 13675 23

Averagesum 228 265 115 161 218 555 340 54890 105




Low leveraged banks





Assets (bil USD) 2687 6768 -4081 4026




Asset Risk 402 5 -10 482

ROA 095 019 076 058

















1587 23553 14786 5033 174116






958 15957 13955 3048 99152





1587 0395 0489 0000 1000

Macro controls(1)





Other controls







































(IV)

Ln(Common Equity) 09986 09908 08470 06641

(00092) (00083) (00094) (00176)






Observations 1587 1587 1587 1587

R-squared 08785 09046 09795 09829









1

1

( ) ( ) ( )


t it t ijt ijt ijt


C Y C X IFRS

(2rsquo)













(03405) (11160) (02540) (06021)


(12893) (07264)


(00810) (00431) (00259) (00310)


(00682) (00544)




Observations 1587 1587 1587 1587 1278 1278 1278 1278


Hansen Test (4) 0174 0156 0119 0117 0567 0591 0529 0572




1 1

1


ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(3)















(00003) (00003)


(00048) (00032)

(RWATIER1) t-1 00218 00199

(00110) (00082)


(00148)






Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (4) 0174 0479 0134 0325 0180 0940 0129











debt funding)




Debt funding 864 310 854 310 854 306

Equity 56 100 66 100 66 100




007 003





1 1

1

ln(funds) ln(funds)

ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(4)








(00594) (00600)


(00406) (00392)


(02058) (02063)





Observations 1587 1331 1442 1587 1331 1442


Hansen Test (3) 0205 0207 0108 0132 0187 0111





1 1

1



i j t i j t i j t

L e v e r a g e

X IF R S

(5)








(00458) (00550)


(00474) (00337)


(01097) (01566)


(01734)





Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (3) 0310 0320 0815 0401 0526 0814 0419






1 1

1


ij t i t ij t ij t

ij t i jt i jt

L eve ra g e

X IF R S

(6)











Dependent variables







(I) (II) (III) (IV) (V) (VI)



(00016) (00016) (00772) (00020) (00015) (00492)





Observations 958 958 958 958 958 958


Hansen Test (4) 0862 0602 0992 0871 0514 0997





1 1

1 1

ln(loans) ln(loans)

ijt i t ijt ijt

it ijt ijt ijt ijt

Leverage

MP Leverage X IFRS

(7)








5 Conclusions




(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)


(00339) (00274)


(00184) (00196)


(00817) (01031)






Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References



































No of MampA


Austria 610 702 298 5 5 5

Australia 3073 742 258 7 4 0

Belgium 1169 579 421 3 7 3

Canada 3402 686 314 6 3 0

Switzerland 2569 370 630 5 5 1

Germany 5169 775 225 13 3 2

Spain 3542 674 326 14 14 2

France 8731 723 277 6 13 5

Italy 3177 808 192 12 35 6

Japan 3555 828 172 5 7 0

Netherlands 993 604 396 1 0 0

Sweden 1921 583 417 4 5 1

United Kingdom 10730 627 373 7 15 3

United States 10273 738 262 17 39 14

Sumaverage 58914 674 326 105 155 42












0

8

16

24

32

96 98 00 02 04 06 08 10 12


16

20

24

28

32

96 98 00 02 04 06 08 10 12

6

8

10

12

14

96 98 00 02 04 06 08 10 12

0

10

20

30

40

96 98 00 02 04 06 08 10 12












Region

Total assets

Equity ()

Total exposureTI

ER 1 ()

Risk weighted

assetsTIER 1 ()

Market value

assets market value

equity ()


()


()

Three-month

interbank rate

adjusted ()


USD)

Number of banks

Asia-Pacific 243 226 123 147 247 269 373 6628 12

Euro Area 270 276 121 239 170 613 319 19967 54

Other Europe 246 334 111 166 227 704 345 14620 16

North America 154 222 105 94 229 633 325 13675 23

Averagesum 228 265 115 161 218 555 340 54890 105




Low leveraged banks





Assets (bil USD) 2687 6768 -4081 4026




Asset Risk 402 5 -10 482

ROA 095 019 076 058

















1587 23553 14786 5033 174116






958 15957 13955 3048 99152





1587 0395 0489 0000 1000

Macro controls(1)





Other controls







































(IV)

Ln(Common Equity) 09986 09908 08470 06641

(00092) (00083) (00094) (00176)






Observations 1587 1587 1587 1587

R-squared 08785 09046 09795 09829









1

1

( ) ( ) ( )


t it t ijt ijt ijt


C Y C X IFRS

(2rsquo)













(03405) (11160) (02540) (06021)


(12893) (07264)


(00810) (00431) (00259) (00310)


(00682) (00544)




Observations 1587 1587 1587 1587 1278 1278 1278 1278


Hansen Test (4) 0174 0156 0119 0117 0567 0591 0529 0572




1 1

1


ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(3)















(00003) (00003)


(00048) (00032)

(RWATIER1) t-1 00218 00199

(00110) (00082)


(00148)






Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (4) 0174 0479 0134 0325 0180 0940 0129











debt funding)




Debt funding 864 310 854 310 854 306

Equity 56 100 66 100 66 100




007 003





1 1

1

ln(funds) ln(funds)

ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(4)








(00594) (00600)


(00406) (00392)


(02058) (02063)





Observations 1587 1331 1442 1587 1331 1442


Hansen Test (3) 0205 0207 0108 0132 0187 0111





1 1

1



i j t i j t i j t

L e v e r a g e

X IF R S

(5)








(00458) (00550)


(00474) (00337)


(01097) (01566)


(01734)





Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (3) 0310 0320 0815 0401 0526 0814 0419






1 1

1


ij t i t ij t ij t

ij t i jt i jt

L eve ra g e

X IF R S

(6)











Dependent variables







(I) (II) (III) (IV) (V) (VI)



(00016) (00016) (00772) (00020) (00015) (00492)





Observations 958 958 958 958 958 958


Hansen Test (4) 0862 0602 0992 0871 0514 0997





1 1

1 1

ln(loans) ln(loans)

ijt i t ijt ijt

it ijt ijt ijt ijt

Leverage

MP Leverage X IFRS

(7)








5 Conclusions




(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)


(00339) (00274)


(00184) (00196)


(00817) (01031)






Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References











0

8

16

24

32

96 98 00 02 04 06 08 10 12


16

20

24

28

32

96 98 00 02 04 06 08 10 12

6

8

10

12

14

96 98 00 02 04 06 08 10 12

0

10

20

30

40

96 98 00 02 04 06 08 10 12












Region

Total assets

Equity ()

Total exposureTI

ER 1 ()

Risk weighted

assetsTIER 1 ()

Market value

assets market value

equity ()


()


()

Three-month

interbank rate

adjusted ()


USD)

Number of banks

Asia-Pacific 243 226 123 147 247 269 373 6628 12

Euro Area 270 276 121 239 170 613 319 19967 54

Other Europe 246 334 111 166 227 704 345 14620 16

North America 154 222 105 94 229 633 325 13675 23

Averagesum 228 265 115 161 218 555 340 54890 105




Low leveraged banks





Assets (bil USD) 2687 6768 -4081 4026




Asset Risk 402 5 -10 482

ROA 095 019 076 058

















1587 23553 14786 5033 174116






958 15957 13955 3048 99152





1587 0395 0489 0000 1000

Macro controls(1)





Other controls







































(IV)

Ln(Common Equity) 09986 09908 08470 06641

(00092) (00083) (00094) (00176)






Observations 1587 1587 1587 1587

R-squared 08785 09046 09795 09829









1

1

( ) ( ) ( )


t it t ijt ijt ijt


C Y C X IFRS

(2rsquo)













(03405) (11160) (02540) (06021)


(12893) (07264)


(00810) (00431) (00259) (00310)


(00682) (00544)




Observations 1587 1587 1587 1587 1278 1278 1278 1278


Hansen Test (4) 0174 0156 0119 0117 0567 0591 0529 0572




1 1

1


ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(3)















(00003) (00003)


(00048) (00032)

(RWATIER1) t-1 00218 00199

(00110) (00082)


(00148)






Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (4) 0174 0479 0134 0325 0180 0940 0129











debt funding)




Debt funding 864 310 854 310 854 306

Equity 56 100 66 100 66 100




007 003





1 1

1

ln(funds) ln(funds)

ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(4)








(00594) (00600)


(00406) (00392)


(02058) (02063)





Observations 1587 1331 1442 1587 1331 1442


Hansen Test (3) 0205 0207 0108 0132 0187 0111





1 1

1



i j t i j t i j t

L e v e r a g e

X IF R S

(5)








(00458) (00550)


(00474) (00337)


(01097) (01566)


(01734)





Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (3) 0310 0320 0815 0401 0526 0814 0419






1 1

1


ij t i t ij t ij t

ij t i jt i jt

L eve ra g e

X IF R S

(6)











Dependent variables







(I) (II) (III) (IV) (V) (VI)



(00016) (00016) (00772) (00020) (00015) (00492)





Observations 958 958 958 958 958 958


Hansen Test (4) 0862 0602 0992 0871 0514 0997





1 1

1 1

ln(loans) ln(loans)

ijt i t ijt ijt

it ijt ijt ijt ijt

Leverage

MP Leverage X IFRS

(7)








5 Conclusions




(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)


(00339) (00274)


(00184) (00196)


(00817) (01031)






Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References













Region

Total assets

Equity ()

Total exposureTI

ER 1 ()

Risk weighted

assetsTIER 1 ()

Market value

assets market value

equity ()


()


()

Three-month

interbank rate

adjusted ()


USD)

Number of banks

Asia-Pacific 243 226 123 147 247 269 373 6628 12

Euro Area 270 276 121 239 170 613 319 19967 54

Other Europe 246 334 111 166 227 704 345 14620 16

North America 154 222 105 94 229 633 325 13675 23

Averagesum 228 265 115 161 218 555 340 54890 105




Low leveraged banks





Assets (bil USD) 2687 6768 -4081 4026




Asset Risk 402 5 -10 482

ROA 095 019 076 058

















1587 23553 14786 5033 174116






958 15957 13955 3048 99152





1587 0395 0489 0000 1000

Macro controls(1)





Other controls







































(IV)

Ln(Common Equity) 09986 09908 08470 06641

(00092) (00083) (00094) (00176)






Observations 1587 1587 1587 1587

R-squared 08785 09046 09795 09829









1

1

( ) ( ) ( )


t it t ijt ijt ijt


C Y C X IFRS

(2rsquo)













(03405) (11160) (02540) (06021)


(12893) (07264)


(00810) (00431) (00259) (00310)


(00682) (00544)




Observations 1587 1587 1587 1587 1278 1278 1278 1278


Hansen Test (4) 0174 0156 0119 0117 0567 0591 0529 0572




1 1

1


ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(3)















(00003) (00003)


(00048) (00032)

(RWATIER1) t-1 00218 00199

(00110) (00082)


(00148)






Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (4) 0174 0479 0134 0325 0180 0940 0129











debt funding)




Debt funding 864 310 854 310 854 306

Equity 56 100 66 100 66 100




007 003





1 1

1

ln(funds) ln(funds)

ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(4)








(00594) (00600)


(00406) (00392)


(02058) (02063)





Observations 1587 1331 1442 1587 1331 1442


Hansen Test (3) 0205 0207 0108 0132 0187 0111





1 1

1



i j t i j t i j t

L e v e r a g e

X IF R S

(5)








(00458) (00550)


(00474) (00337)


(01097) (01566)


(01734)





Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (3) 0310 0320 0815 0401 0526 0814 0419






1 1

1


ij t i t ij t ij t

ij t i jt i jt

L eve ra g e

X IF R S

(6)











Dependent variables







(I) (II) (III) (IV) (V) (VI)



(00016) (00016) (00772) (00020) (00015) (00492)





Observations 958 958 958 958 958 958


Hansen Test (4) 0862 0602 0992 0871 0514 0997





1 1

1 1

ln(loans) ln(loans)

ijt i t ijt ijt

it ijt ijt ijt ijt

Leverage

MP Leverage X IFRS

(7)








5 Conclusions




(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)


(00339) (00274)


(00184) (00196)


(00817) (01031)






Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References















1587 23553 14786 5033 174116






958 15957 13955 3048 99152





1587 0395 0489 0000 1000

Macro controls(1)





Other controls







































(IV)

Ln(Common Equity) 09986 09908 08470 06641

(00092) (00083) (00094) (00176)






Observations 1587 1587 1587 1587

R-squared 08785 09046 09795 09829









1

1

( ) ( ) ( )


t it t ijt ijt ijt


C Y C X IFRS

(2rsquo)













(03405) (11160) (02540) (06021)


(12893) (07264)


(00810) (00431) (00259) (00310)


(00682) (00544)




Observations 1587 1587 1587 1587 1278 1278 1278 1278


Hansen Test (4) 0174 0156 0119 0117 0567 0591 0529 0572




1 1

1


ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(3)















(00003) (00003)


(00048) (00032)

(RWATIER1) t-1 00218 00199

(00110) (00082)


(00148)






Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (4) 0174 0479 0134 0325 0180 0940 0129











debt funding)




Debt funding 864 310 854 310 854 306

Equity 56 100 66 100 66 100




007 003





1 1

1

ln(funds) ln(funds)

ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(4)








(00594) (00600)


(00406) (00392)


(02058) (02063)





Observations 1587 1331 1442 1587 1331 1442


Hansen Test (3) 0205 0207 0108 0132 0187 0111





1 1

1



i j t i j t i j t

L e v e r a g e

X IF R S

(5)








(00458) (00550)


(00474) (00337)


(01097) (01566)


(01734)





Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (3) 0310 0320 0815 0401 0526 0814 0419






1 1

1


ij t i t ij t ij t

ij t i jt i jt

L eve ra g e

X IF R S

(6)











Dependent variables







(I) (II) (III) (IV) (V) (VI)



(00016) (00016) (00772) (00020) (00015) (00492)





Observations 958 958 958 958 958 958


Hansen Test (4) 0862 0602 0992 0871 0514 0997





1 1

1 1

ln(loans) ln(loans)

ijt i t ijt ijt

it ijt ijt ijt ijt

Leverage

MP Leverage X IFRS

(7)








5 Conclusions




(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)


(00339) (00274)


(00184) (00196)


(00817) (01031)






Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References




































(IV)

Ln(Common Equity) 09986 09908 08470 06641

(00092) (00083) (00094) (00176)






Observations 1587 1587 1587 1587

R-squared 08785 09046 09795 09829









1

1

( ) ( ) ( )


t it t ijt ijt ijt


C Y C X IFRS

(2rsquo)













(03405) (11160) (02540) (06021)


(12893) (07264)


(00810) (00431) (00259) (00310)


(00682) (00544)




Observations 1587 1587 1587 1587 1278 1278 1278 1278


Hansen Test (4) 0174 0156 0119 0117 0567 0591 0529 0572




1 1

1


ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(3)















(00003) (00003)


(00048) (00032)

(RWATIER1) t-1 00218 00199

(00110) (00082)


(00148)






Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (4) 0174 0479 0134 0325 0180 0940 0129











debt funding)




Debt funding 864 310 854 310 854 306

Equity 56 100 66 100 66 100




007 003





1 1

1

ln(funds) ln(funds)

ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(4)








(00594) (00600)


(00406) (00392)


(02058) (02063)





Observations 1587 1331 1442 1587 1331 1442


Hansen Test (3) 0205 0207 0108 0132 0187 0111





1 1

1



i j t i j t i j t

L e v e r a g e

X IF R S

(5)








(00458) (00550)


(00474) (00337)


(01097) (01566)


(01734)





Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (3) 0310 0320 0815 0401 0526 0814 0419






1 1

1


ij t i t ij t ij t

ij t i jt i jt

L eve ra g e

X IF R S

(6)











Dependent variables







(I) (II) (III) (IV) (V) (VI)



(00016) (00016) (00772) (00020) (00015) (00492)





Observations 958 958 958 958 958 958


Hansen Test (4) 0862 0602 0992 0871 0514 0997





1 1

1 1

ln(loans) ln(loans)

ijt i t ijt ijt

it ijt ijt ijt ijt

Leverage

MP Leverage X IFRS

(7)








5 Conclusions




(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)


(00339) (00274)


(00184) (00196)


(00817) (01031)






Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References









1

1

( ) ( ) ( )


t it t ijt ijt ijt


C Y C X IFRS

(2rsquo)













(03405) (11160) (02540) (06021)


(12893) (07264)


(00810) (00431) (00259) (00310)


(00682) (00544)




Observations 1587 1587 1587 1587 1278 1278 1278 1278


Hansen Test (4) 0174 0156 0119 0117 0567 0591 0529 0572




1 1

1


ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(3)















(00003) (00003)


(00048) (00032)

(RWATIER1) t-1 00218 00199

(00110) (00082)


(00148)






Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (4) 0174 0479 0134 0325 0180 0940 0129











debt funding)




Debt funding 864 310 854 310 854 306

Equity 56 100 66 100 66 100




007 003





1 1

1

ln(funds) ln(funds)

ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(4)








(00594) (00600)


(00406) (00392)


(02058) (02063)





Observations 1587 1331 1442 1587 1331 1442


Hansen Test (3) 0205 0207 0108 0132 0187 0111





1 1

1



i j t i j t i j t

L e v e r a g e

X IF R S

(5)








(00458) (00550)


(00474) (00337)


(01097) (01566)


(01734)





Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (3) 0310 0320 0815 0401 0526 0814 0419






1 1

1


ij t i t ij t ij t

ij t i jt i jt

L eve ra g e

X IF R S

(6)











Dependent variables







(I) (II) (III) (IV) (V) (VI)



(00016) (00016) (00772) (00020) (00015) (00492)





Observations 958 958 958 958 958 958


Hansen Test (4) 0862 0602 0992 0871 0514 0997





1 1

1 1

ln(loans) ln(loans)

ijt i t ijt ijt

it ijt ijt ijt ijt

Leverage

MP Leverage X IFRS

(7)








5 Conclusions




(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)


(00339) (00274)


(00184) (00196)


(00817) (01031)






Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References













(03405) (11160) (02540) (06021)


(12893) (07264)


(00810) (00431) (00259) (00310)


(00682) (00544)




Observations 1587 1587 1587 1587 1278 1278 1278 1278


Hansen Test (4) 0174 0156 0119 0117 0567 0591 0529 0572




1 1

1


ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(3)















(00003) (00003)


(00048) (00032)

(RWATIER1) t-1 00218 00199

(00110) (00082)


(00148)






Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (4) 0174 0479 0134 0325 0180 0940 0129











debt funding)




Debt funding 864 310 854 310 854 306

Equity 56 100 66 100 66 100




007 003





1 1

1

ln(funds) ln(funds)

ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(4)








(00594) (00600)


(00406) (00392)


(02058) (02063)





Observations 1587 1331 1442 1587 1331 1442


Hansen Test (3) 0205 0207 0108 0132 0187 0111





1 1

1



i j t i j t i j t

L e v e r a g e

X IF R S

(5)








(00458) (00550)


(00474) (00337)


(01097) (01566)


(01734)





Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (3) 0310 0320 0815 0401 0526 0814 0419






1 1

1


ij t i t ij t ij t

ij t i jt i jt

L eve ra g e

X IF R S

(6)











Dependent variables







(I) (II) (III) (IV) (V) (VI)



(00016) (00016) (00772) (00020) (00015) (00492)





Observations 958 958 958 958 958 958


Hansen Test (4) 0862 0602 0992 0871 0514 0997





1 1

1 1

ln(loans) ln(loans)

ijt i t ijt ijt

it ijt ijt ijt ijt

Leverage

MP Leverage X IFRS

(7)








5 Conclusions




(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)


(00339) (00274)


(00184) (00196)


(00817) (01031)






Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References




1 1

1


ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(3)















(00003) (00003)


(00048) (00032)

(RWATIER1) t-1 00218 00199

(00110) (00082)


(00148)






Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (4) 0174 0479 0134 0325 0180 0940 0129











debt funding)




Debt funding 864 310 854 310 854 306

Equity 56 100 66 100 66 100




007 003





1 1

1

ln(funds) ln(funds)

ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(4)








(00594) (00600)


(00406) (00392)


(02058) (02063)





Observations 1587 1331 1442 1587 1331 1442


Hansen Test (3) 0205 0207 0108 0132 0187 0111





1 1

1



i j t i j t i j t

L e v e r a g e

X IF R S

(5)








(00458) (00550)


(00474) (00337)


(01097) (01566)


(01734)





Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (3) 0310 0320 0815 0401 0526 0814 0419






1 1

1


ij t i t ij t ij t

ij t i jt i jt

L eve ra g e

X IF R S

(6)











Dependent variables







(I) (II) (III) (IV) (V) (VI)



(00016) (00016) (00772) (00020) (00015) (00492)





Observations 958 958 958 958 958 958


Hansen Test (4) 0862 0602 0992 0871 0514 0997





1 1

1 1

ln(loans) ln(loans)

ijt i t ijt ijt

it ijt ijt ijt ijt

Leverage

MP Leverage X IFRS

(7)








5 Conclusions




(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)


(00339) (00274)


(00184) (00196)


(00817) (01031)






Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References











(00003) (00003)


(00048) (00032)

(RWATIER1) t-1 00218 00199

(00110) (00082)


(00148)






Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (4) 0174 0479 0134 0325 0180 0940 0129











debt funding)




Debt funding 864 310 854 310 854 306

Equity 56 100 66 100 66 100




007 003





1 1

1

ln(funds) ln(funds)

ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(4)








(00594) (00600)


(00406) (00392)


(02058) (02063)





Observations 1587 1331 1442 1587 1331 1442


Hansen Test (3) 0205 0207 0108 0132 0187 0111





1 1

1



i j t i j t i j t

L e v e r a g e

X IF R S

(5)








(00458) (00550)


(00474) (00337)


(01097) (01566)


(01734)





Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (3) 0310 0320 0815 0401 0526 0814 0419






1 1

1


ij t i t ij t ij t

ij t i jt i jt

L eve ra g e

X IF R S

(6)











Dependent variables







(I) (II) (III) (IV) (V) (VI)



(00016) (00016) (00772) (00020) (00015) (00492)





Observations 958 958 958 958 958 958


Hansen Test (4) 0862 0602 0992 0871 0514 0997





1 1

1 1

ln(loans) ln(loans)

ijt i t ijt ijt

it ijt ijt ijt ijt

Leverage

MP Leverage X IFRS

(7)








5 Conclusions




(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)


(00339) (00274)


(00184) (00196)


(00817) (01031)






Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References











debt funding)




Debt funding 864 310 854 310 854 306

Equity 56 100 66 100 66 100




007 003





1 1

1

ln(funds) ln(funds)

ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(4)








(00594) (00600)


(00406) (00392)


(02058) (02063)





Observations 1587 1331 1442 1587 1331 1442


Hansen Test (3) 0205 0207 0108 0132 0187 0111





1 1

1



i j t i j t i j t

L e v e r a g e

X IF R S

(5)








(00458) (00550)


(00474) (00337)


(01097) (01566)


(01734)





Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (3) 0310 0320 0815 0401 0526 0814 0419






1 1

1


ij t i t ij t ij t

ij t i jt i jt

L eve ra g e

X IF R S

(6)











Dependent variables







(I) (II) (III) (IV) (V) (VI)



(00016) (00016) (00772) (00020) (00015) (00492)





Observations 958 958 958 958 958 958


Hansen Test (4) 0862 0602 0992 0871 0514 0997





1 1

1 1

ln(loans) ln(loans)

ijt i t ijt ijt

it ijt ijt ijt ijt

Leverage

MP Leverage X IFRS

(7)








5 Conclusions




(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)


(00339) (00274)


(00184) (00196)


(00817) (01031)






Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References





1 1

1

ln(funds) ln(funds)

ijt i t ijt ijt

ijt ijt ijt

Leverage

X IFRS

(4)








(00594) (00600)


(00406) (00392)


(02058) (02063)





Observations 1587 1331 1442 1587 1331 1442


Hansen Test (3) 0205 0207 0108 0132 0187 0111





1 1

1



i j t i j t i j t

L e v e r a g e

X IF R S

(5)








(00458) (00550)


(00474) (00337)


(01097) (01566)


(01734)





Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (3) 0310 0320 0815 0401 0526 0814 0419






1 1

1


ij t i t ij t ij t

ij t i jt i jt

L eve ra g e

X IF R S

(6)











Dependent variables







(I) (II) (III) (IV) (V) (VI)



(00016) (00016) (00772) (00020) (00015) (00492)





Observations 958 958 958 958 958 958


Hansen Test (4) 0862 0602 0992 0871 0514 0997





1 1

1 1

ln(loans) ln(loans)

ijt i t ijt ijt

it ijt ijt ijt ijt

Leverage

MP Leverage X IFRS

(7)








5 Conclusions




(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)


(00339) (00274)


(00184) (00196)


(00817) (01031)






Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References





1 1

1



i j t i j t i j t

L e v e r a g e

X IF R S

(5)








(00458) (00550)


(00474) (00337)


(01097) (01566)


(01734)





Observations 1587 1331 1442 1587 1331 1442 1587


Hansen Test (3) 0310 0320 0815 0401 0526 0814 0419






1 1

1


ij t i t ij t ij t

ij t i jt i jt

L eve ra g e

X IF R S

(6)











Dependent variables







(I) (II) (III) (IV) (V) (VI)



(00016) (00016) (00772) (00020) (00015) (00492)





Observations 958 958 958 958 958 958


Hansen Test (4) 0862 0602 0992 0871 0514 0997





1 1

1 1

ln(loans) ln(loans)

ijt i t ijt ijt

it ijt ijt ijt ijt

Leverage

MP Leverage X IFRS

(7)








5 Conclusions




(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)


(00339) (00274)


(00184) (00196)


(00817) (01031)






Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References






1 1

1


ij t i t ij t ij t

ij t i jt i jt

L eve ra g e

X IF R S

(6)











Dependent variables







(I) (II) (III) (IV) (V) (VI)



(00016) (00016) (00772) (00020) (00015) (00492)





Observations 958 958 958 958 958 958


Hansen Test (4) 0862 0602 0992 0871 0514 0997





1 1

1 1

ln(loans) ln(loans)

ijt i t ijt ijt

it ijt ijt ijt ijt

Leverage

MP Leverage X IFRS

(7)








5 Conclusions




(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)


(00339) (00274)


(00184) (00196)


(00817) (01031)






Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References








Dependent variables







(I) (II) (III) (IV) (V) (VI)



(00016) (00016) (00772) (00020) (00015) (00492)





Observations 958 958 958 958 958 958


Hansen Test (4) 0862 0602 0992 0871 0514 0997





1 1

1 1

ln(loans) ln(loans)

ijt i t ijt ijt

it ijt ijt ijt ijt

Leverage

MP Leverage X IFRS

(7)








5 Conclusions




(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)


(00339) (00274)


(00184) (00196)


(00817) (01031)






Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References





1 1

1 1

ln(loans) ln(loans)

ijt i t ijt ijt

it ijt ijt ijt ijt

Leverage

MP Leverage X IFRS

(7)








5 Conclusions




(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)


(00339) (00274)


(00184) (00196)


(00817) (01031)






Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References



5 Conclusions




(I) (II) (III) (IV) (V) (VI)


(00618) (00777)


(00374) (00373)


(01283) (01422)


(00339) (00274)


(00184) (00196)


(00817) (01031)






Observations 1667 1317 1598 1667 1317 1598


Hansen Test (4) 0174 0678 0264 0206 0746 0234







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References







References


















































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References









































































No Title Author

557 April 2016



556 April 2016


Gianpaolo Parise

555 March 2016



554 March 2016



553 March 2016



552 March 2016


551 March 2016



550 March 2016



549 March 2016



548 March 2016



547 March 2016



546 March 2016



545 February 2016


544 February 2016


Waldyr D Areosa

543 January 2016



542 January 2016



Abstract

Contents

1 Introduction












5 Conclusions

References


bis working papers · bis working papers no 558 why bank capital matters for monetary policy ......

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