# Bank Capital Structure and Procyclicality of Leverage

## Summary

## Excerpt

## Table Of Contents

- Cover
- Title
- Copyright
- About the author(s)/editor(s)
- About the book
- This eBook can be cited
- Table of Contents
- List of Tables
- List of Figures
- Abbreviations
- 1 Introduction
- 2 Procyclicality
- 2.1 Definition of procyclicality
- 2.2 Causes of procyclicality
- 2.2.1 Deviations from the efficient market hypothesis
- 2.2.2 Credit rating agencies
- 2.2.3 Economic policy
- 2.2.4 Basel II and procyclicality
- 2.2.5 Fair value accounting
- 2.2.6 Leverage
- 3 The determinants of bank capital structure
- 3.1 Definition of capital structure
- 3.2 Theories of capital structure
- 3.2.1 Modigliani and Miller Irrelevance Theory
- 3.2.2 Trade-Off Theory
- 3.2.3 Pecking Order Theory
- 3.2.4 Agency Theory
- 3.3 Empirical research on the determination of capital structure
- 3.3.1 Determinants of firms capital structure
- 3.3.2 Determinants of banks capital structure
- 4 Research design
- 4.1 Procyclicality of leverage
- 4.1.1 Data and sample selection
- 4.1.2 The variables
- 4.1.2.1 The dependent variables
- 4.1.2.2 The explanatory variable
- 4.1.2.3 The control variables
- 4.1.3 Descriptive statistics
- 4.1.4 Empirical research model
- 4.1.4.1 First model
- 4.1.4.2 Second model
- 4.1.4.3 Third model
- 4.1.4.4 Fourth and fifth models
- 4.1.4.5 Sixth model
- 4.1.4.6 Seventh model
- 4.1.4.7 Eighth model
- 4.1.5 Data analysis and results
- 4.2 Determinants of leverage
- 4.2.1 Data and sample selection
- 4.2.2 The variables
- 4.2.2.1 Size
- 4.2.2.2 Collateral
- 4.2.2.3 Profit
- 4.2.2.4 Inflation
- 4.2.2.5 Gross domestic product
- 4.2.2.6 Money supply
- 4.2.2.7 Exchange rate
- 4.2.2.8 Number of banks
- 4.2.3 Descriptive statistics
- 4.2.4 Empirical research model
- 4.2.5 Data analysis and results
- 5 Conclusion
- 6 References

*Table 2.1:* Description of Capital

*Table 2.2:* Risk Weight of Assets

*Table 2.3:* Features of Each Level in the Fair Value Hierarchy

*Table 2.4:* A List of Empirical Studies in Literature

*Table 4.1:* The Number of Banks at the End of the Last Month of the Year

*Table 4.2:* Variables, Abbreviations and Definitions

*Table 4.3:* Leverage Ratios

*Table 4.4:* Descriptive Statistics of Leverage Ratios

*Table 4.5:* Descriptive Statistics of Explanatory Variables and Control Variables

*Table 4.6:* Fixed Effect and Random Effect Models

*Table 4.7:* The Relationship between Leverage Growth and Asset Growth

*Table 4.8:* The Relationship between Leverage and Asset Growth Considering Banking Groups

*Table 4.9:* Variable, Abbreviations and Definitions

*Table 4.10:* Descriptive Statistics of Variables

*Table 4.11:* Correlation Matrix

*Table 4.12:* Predicted Effects of Explanatory Variables on Leverage

*Table 4.13:* The Relationship between Leverage and Bank-Specific and Macroeconomic Variables

*Figure 2.1:* Proposed changes to elements of the capital ratio under Basel II

*Figure 2.2:* The procyclicality effects of risk-sensitive regulatory capital

*Figure 2.3:* Leverage adjustment in upturn and downturn

*Figure 3.1:* The Static Trade-Off Theory of capital structure

*Figure 3.2:* Agency costs depending on funding sources

*Figure 4.1:* Growth of assets and leverage

## Details

- Pages
- 120
- Year
- 2018
- ISBN (PDF)
- 9783631753033
- ISBN (ePUB)
- 9783631753040
- ISBN (MOBI)
- 9783631753057
- ISBN (Softcover)
- 9783631746219
- DOI
- 10.3726/b13845
- Language
- English
- Publication date
- 2019 (April)
- Keywords
- Basel 2 Fair Value Accounting Risk-weight of assets Asset growth Debt Equity
- Published
- Berlin, Bern, Bruxelles, New York, Oxford, Warszawa, Wien, 2018, 120 p. 6 b/w ill., 17 b/w tab.