The Role of Bank Capital in Bank Holding Companies’ Decisions

The Role of Bank Capital in Bank Holding Companies’ Decisions PDF

Author: Mr.Adolfo Barajas

Publisher: International Monetary Fund

Published: 2015-03-16

Total Pages: 37

ISBN-13: 1498372236

DOWNLOAD EBOOK →

This paper examines the role of bank capital in decision-making by bank holding companies (BHCs) in the United States. Following Chami and Cosimano’s (2001) call option approach to bank capital, BHCs optimally choose the amount of capital to insure the bank against becoming capital constrained in the future. We provide empirical support for this model, and find that a higher optimal level of capital leads to higher loan rates. Furthermore, higher loan rates result in lower amounts of lending. Thus, an increase in capital requirements is likely to lead to higher loan rates and a significant reduction in lending.

Examining the Gao Report on Government Support for Bank Holding Companies

Examining the Gao Report on Government Support for Bank Holding Companies PDF

Author: United States. Congress

Publisher: Createspace Independent Publishing Platform

Published: 2017-12-07

Total Pages: 140

ISBN-13: 9781981500130

DOWNLOAD EBOOK →

Examining the GAO report on government support for bank holding companies : hearing before the Subcommittee on Financial Institutions and Consumer Protection of the Committee on Banking, Housing, and Urban Affairs, United States Senate, One Hundred Thirteenth Congress, second session, on examining the GAO's report on the government's extraordinary assistance to large bank holding companies a