EconStor >
Leuphana Universität Lüneburg >
Institut für Volkswirtschaftslehre, Leuphana Universität Lüneburg >
Working Paper Series in Economics, Leuphana Universität Lüneburg  >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/57119
  
Title:Leveraging and risk taking within the German banking system: Evidence from the financial crisis in 2007 and 2008 PDF Logo
Authors:Schmielewski, Frank
Issue Date:2012
Series/Report no.:University of Lüneburg Working Paper Series in Economics 229
Abstract:The present study is centered primarily on determining whether the German banking system is to be characterized by procyclical behavior from 2000 to 2011 and to what extent specific sectors of the German banking system showed significant balance sheet operations to increase their leverage within years of booming asset prices. First, the results of this study show that the different sectors of the German banking system operate their business more or less procyclically. Second, the study provides some empirical evidence that banks increasing their leverages during periods of extraordinary high returns provided in the financial markets preferred funding their assets by shortterm lending in the interbank market. Third, the study clarified that banks, preferring high leverages, can apparently be characterized by a high volatility of return on assets and low distances to default over the observation period. Finally, the examined regression models provide some empirical evidence that requirements on countercyclical capital buffers should be considered by regulatory authorities in the context of macroeconomic indicators.
Subjects:liquidity and leverage
financial crises, asset pricing
information and market efficiency
government policy and regulation, international financial markets, funding policy
financial risk and risk management
capital and ownership structure
countercyclical capital buffers
distance to default
JEL:G01
G12
G14
G28
G15
G32
Document Type:Working Paper
Appears in Collections:Working Paper Series in Economics, Leuphana Universität Lüneburg

Files in This Item:
File Description SizeFormat
683954008.pdf173.41 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/57119

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.