Bank Capital Constraints, Lending Supply and Economic Activity

2018 ◽  
Author(s):  
Antonio Maria Conti ◽  
Andrea Nobili ◽  
Federico Maria Signoretti
Keyword(s):  
Economic Activity ◽  
Bank Capital ◽  
Capital Constraints

scholarly journals Bank Capital Structure Dynamics and Covid-19: Evidence from South Asia

2021 ◽  
Vol 3 (3) ◽  
Author(s):  
Khalil Ullah Mohammad ◽  
Mohsin Raza Khan
Keyword(s):  
Capital Structure ◽  
South Asia ◽  
South Asian ◽  
Economic Activity ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Bank Capital ◽  
Structure Dynamics ◽  
The Impact ◽  
The Capital Structure

The severity in terms of economic activity of the Covid-19 crisis was higher than the global financial crisis. Covid-19 has not only challenged the economic activity across the world but has put to test how the bank operates under the global crises. The objective of this paper is to identify the impact of the Covid-19 crisis on the South Asian banking sector. We investigate if South Asian banks have target leverage and how the Covid-19 crisis impacted their capital structure dynamics. To fulfill the objective, past data on all banks of South Asian countries listed in the Thomson Reuter Refinitiv were considered. The sample ended up including quarterly data of banks from India, Pakistan, Bangladesh, Sri Lanka, Bhutan Nepal and Afghanistan. Engle-Granger's two-step procedure for error correction and two-step GMM estimation was employed to measure the speed of adjustment and the impact of Covid-19 on bank capital. The study found that the capital structure determinants favor the static trade-off theory for South Asian banks. It is also observed that South Asian banks’ capital was negatively impacted by Covid-19. The analysis supports the view of leverage convergence for the capital structure. This study improves our understanding of the capital structure dynamics of banks in response to exogenous shocks in South Asia.

Financial Risk Capacity

2021 ◽  
Vol 13 (4) ◽  
pp. 142-181
Author(s):  
Saki Bigio ◽  
Adrien d’Avernas
Keyword(s):  
Adverse Selection ◽  
Economic Activity ◽  
Financial Crises ◽  
Financial Risk ◽  
Bank Capital ◽  
Information Asymmetries ◽  
Coordination Failure ◽  
Slow Recovery ◽  
Profit Margins

Financial crises are particularly severe and lengthy when banks fail to recapitalize after bearing large losses. We present a model that explains the slow recovery of bank capital and economic activity. Banks provide intermediation in markets with information asymmetries. Large equity losses force banks to tighten intermediation, which exacerbates adverse selection. Adverse selection lowers bank profit margins, which slows both the internal growth of equity and equity injections. This mechanism generates financial crises characterized by persistent low growth. The lack of equity injections during crises is a coordination failure that is solved when the decision to recapitalize banks is centralized. (JEL D82, E32, E44, G01, G21, G32, L25)

The effects of bank capital constraints on post-acquisition performance

2012 ◽  
Vol 39 (1) ◽  
pp. 75-99 ◽  
Author(s):  
Chris Brune ◽  
Kevin Lee ◽  
Scott Miller
Keyword(s):  
Bank Capital ◽  
Acquisition Performance ◽  
Capital Constraints

Economic Activity

1967 ◽  
Author(s):  
G. C. Harcourt ◽  
P. H. Karmel ◽  
R. H. Wallace
Keyword(s):  
Economic Activity

Institutional Specifics of Business Self-regulation

2003 ◽  
pp. 88-98 ◽  
Author(s):  
A. Obydenov
Keyword(s):  
Economic Activity ◽  
Self Regulation ◽  
Institutional Arrangement ◽  
Voluntary Membership ◽  
Sufficient Set ◽  
The Subject ◽  
Necessary And Sufficient ◽  
Object Of Control ◽  
Self Enforcement

Self-regulation appears to be a special institution where economic actors establish their own rules of economic activity for themselves in a specific business field. At the same time they are the object of control within these rules and the subject of legal management of the controller. Self-regulation contains necessary prerequisites for fundamental resolution of the problem of "controlling the controller". The necessary and sufficient set of five self-regulation organization functions provides efficiency of self-regulation as the institutional arrangement. The voluntary membership in a self-regulation organization is essential for ensuring self-enforcement of institutional arrangement of self-regulation.

Economic effects of monetary policy in Russia: What do large datasets tell us?

2020 ◽  
pp. 31-53 ◽  
Author(s):  
Anna A. Pestova ◽  
Natalia A. Rostova
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Interest Rates ◽  
Economic Activity ◽  
Global Financial Crisis ◽  
Exchange Rate Regime ◽  
Aggregate Demand ◽  
Economic Effects ◽  
Theoretical Concepts ◽  
Empirical Estimates

Is the Bank of Russia able to control inflation and, at the same time, manage aggregate demand using its interest rate instruments? In other words, are empirical estimates of the effects of monetary policy in Russia consistent with the theoretical concepts and experience of advanced economies? This paper is aimed at addressing these issues. Unlike previous research, we employ “big data” — a large dataset of macroeconomic and financial data — to estimate the effects of monetary policy in Russia. We focus exclusively on the period after the 2008—2009 global financial crisis when the Bank of Russia announced the abandoning of its fixed ruble exchange rate regime and started to gradually transit to an interest rate management. Our estimation results do not confirm standard responses of key economic activity and price variables to tightening of monetary policy. Specifically, our estimates do not reveal a statistically significant restraining effect of the Bank of Russia’s policy of high interest rates on inflation in recent years. At the same time, we find a significant deteriorating effect of the monetary tightening on economic activity indicators: according to our conservative estimates, each of the key rate increases occurred in March and December 2014 had led to a decrease in the industrial production index by about 0.2 percentage points within a year.

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