Bank Capital Redux: Solvency, Liquidity, and Crisis

• Òscar Jordà ^[4] ; Björn Richter ^[1] ; Moritz Schularick ^[2] ; Alan M Taylor ^[3]
  1. [1] Universitat Pompeu Fabra

     Universitat Pompeu Fabra

     Barcelona, España

     
  2. [2] University of Bonn

     University of Bonn

     Kreisfreie Stadt Bonn, Alemania

     
  3. [3] University of California System

     University of California System

     Estados Unidos

     
  4. [4] Federal Reserve Bank of San Francisco

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• Localización: Review of economic studies, ISSN 0034-6527, Vol. 88, Nº 1, 2021, págs. 260-286
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Dialnet Métricas: 2 Citas
• Resumen

  • What is the relationship between bank capital, the risk of a financial crisis, and its severity? This article introduces the first comprehensive analysis of the long-run evolution of the capital structure of modern banking using newly constructed data for banks’ balance sheets in 17 countries since 1870. In addition to establishing stylized facts on the changing funding mix of banks, we study the nexus between capital structure and financial instability. We find no association between higher capital and lower risk of banking crisis. However, economies with better capitalized banking systems recover faster from financial crises as credit begins to flow back more readily.