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Regulation and the Determination of Bank Capital Changes: A Note
Author(s) -
DIETRICH J. KIMBALL,
JAMES CHRISTOPHER
Publication year - 1983
Publication title -
the journal of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 18.151
H-Index - 299
eISSN - 1540-6261
pISSN - 0022-1082
DOI - 10.1111/j.1540-6261.1983.tb03848.x
Subject(s) - capital (architecture) , economics , capital adequacy ratio , capital requirement , monetary economics , bank failure , macroeconomics , econometrics , financial system , microeconomics , geography , profit (economics) , archaeology , incentive
The effectiveness of bank capital adequacy requirements is examined in this paper. Using empirical tests similar to those employed by Peltzman and Mingo, no significant relationship is found between changes in bank capital and the capital standards imposed by regulators. The findings conflict with those of previous studies. The conflict in findings, it is argued, results from the failure of previous studies to account for the effect of binding deposit rate ceilings.