The Role of Bank Capital in Bank Holding Companies’ Decisions

2015 ◽  
Author(s):  
Adolfo Barajas ◽  
Thomas F. Cosimano ◽  
Dalia Hakura ◽  
Sebastian Roelands
Keyword(s):  
Bank Capital ◽  
Bank Holding Companies ◽  
Holding Companies

The Role of Bank Capital in Bank Holding Companies’ Decisions

2015 ◽  
Vol 15 (57) ◽  
pp. 1 ◽  
Author(s):  
Adolfo Barajas ◽  
Thomas Cosimano ◽  
Dalia Hakura ◽  
Sebastian Roelands ◽  
◽  
...  
Keyword(s):  
Bank Capital ◽  
Bank Holding Companies ◽  
Holding Companies

BANK EARNINGS MANAGEMENT AND DIVIDEND POLICY UNDER AGENCY PROBLEM CONTEXTS

2020 ◽  
Vol 15 (02) ◽  
pp. 2050005
Author(s):  
DUNG VIET TRAN
Keyword(s):  
Earnings Management ◽  
Information Asymmetry ◽  
Dividend Policy ◽  
Bank Holding Companies ◽  
Holding Companies ◽  
Additional Information ◽  
Discretionary Behaviors ◽  
The Impact ◽  
High Information

Using a large sample of U.S. bank holding companies (BHC) from 2000:Q1–2017:Q4, we investigate the impacts of dividend policy to bank earnings management, and document that banks that pay dividends tend to be less opaque than banks that do not pay dividends. The dividend policy not only impacts the conditional average earnings management of banks, but also exerts influence on their dispersion. The impact of dividend policy appears to be more profound for highly opaque banks. We identify different conditions that motivate different discretionary behaviors of banks, which allows us to better observe different managerial motives between dividend-paying and dividend-non-paying banks. Under high information asymmetry context, there is valuably additional information conveyed by paying dividends, and it follows that the role of dividends as a means of conveying information is more pronounced. For banks subject to high agency problems, paying dividends make them to be less opaque through reducing the discretionary behaviors.

scholarly journals Can Higher Capital Discipline Bank Risk: Evidence from a Meta-Analysis

2019 ◽  
Vol 12 (3) ◽  
pp. 134 ◽  
Author(s):  
Quang T. T. Nguyen ◽  
Son T. B. Nguyen ◽  
Quang V. Nguyen
Keyword(s):  
Fixed Effects ◽  
Meta Analysis ◽  
Model Specification ◽  
Bank Risk ◽  
Bank Capital ◽  
Holding Companies ◽  
Wide Range ◽  
Negative Effect ◽  
Sample Characteristics

Capital regulation has been among the most important tools for regulators to maintain the credibility and stability of the financial systems. However, the question whether higher capital induce banks to take lower risk remains unanswered. This paper examines the effect of capital on bank risk employing a meta-analysis approach, which considers a wide range of empirical papers from 1990 to 2018. We found that the negative effect of bank capital on bank risk, which implies the discipline role of bank capital, is more likely to be reported. However, the reported results are suffered from the publication bias due to the preference for significant estimates and favored results. Our study also shows that the differences in the previous studies’ conclusions are primarily caused by the differences in the study design, particularly the risk and capital measurements; the model specification such as the concern for the dynamic of bank risk behaviors, the endogeneity of the capital and unobserved time fixed effects; along with and the sample characteristics such as the sample size, and whether banks are bank holding companies or located in high-income countries.

Big Banks, Idiosyncratic Volatility, and Systemic Risk

2017 ◽  
Vol 107 (5) ◽  
pp. 603-607 ◽  
Author(s):  
Ricardo T. Fernholz ◽  
Christoffer Koch
Keyword(s):  
Systemic Risk ◽  
Idiosyncratic Volatility ◽  
Bank Holding Companies ◽  
Power Law Distribution ◽  
Holding Companies ◽  
Aggregate Risk ◽  
Asset Volatilities ◽  
Changing Role ◽  
Obvious Source

Starting in the 1990s, US bank assets grew more concentrated among a few large institutions. We explore the changing role of idiosyncratic volatility as a shaping force of the bank asset power law distribution. Our results reveal that idiosyncratic asset volatilities for bank-holding companies declined since the 1990s. To the extent that firm-specific shocks can have significant macroeconomic consequences, this result implies that even as one obvious source of aggregate risk and contagion--bank asset concentration--has increased, another important source--idiosyncratic volatility--has diminished.

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