Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/183577
Authors: 
Bucher, Monika
Dietrich, Diemo
Hauck, Achim
Year of Publication: 
2018
Series/Report no.: 
Bundesbank Discussion Paper No. 43/2018
Abstract: 
A bank's decision on loan supply and capital structure determines its immediate bankruptcy risk as well as the future availability of internal funds. These internal funds in turn determine a bank's future costs of external finance and future vulnerability to bankruptcy risks. We study these intra- and intertemporal links and analyze the influence of risk-weighted capital-to-asset ratios, liquidity coverage ratios and regulatory margin calls on the dynamics of loan supply and bank stability. Only regulatory margin calls or large liquidity coverage ratios achieve bank stability for all risk levels, but for large risks a bank will stop credit intermediation.
Subjects: 
bank lending
banking crisis
bank capital regulation
liquidity regulation
JEL: 
G01
G21
G28
E32
ISBN: 
978-3-95729-514-9
Document Type: 
Working Paper

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