Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/207748 
Year of Publication: 
2019
Series/Report no.: 
NBB Working Paper No. 369
Publisher: 
National Bank of Belgium, Brussels
Abstract: 
Frictions prevent banks to immediately adjust their capital ratio towards their desired and/or imposed level. This paper analyzes (i) whether or not these frictions are larger for regulatory capital ratios vis-à-vis a plain leverage ratio; (ii) which adjustment channels banks use to adjust their capital ratio; and (iii) how the speed of adjustment and adjustment channels differ between large, systemic and complex banks versus small banks. Our results, obtained using a sample of listed banks across OECD countries for the 2001-2012 period, bear critical policy implications for the implementation of new (systemic risk-based) capital requirements and their impact on banks' balance sheets, specifically lending, and hence the real economy.
Subjects: 
capital structure
speed of adjustment
systemic risk
systemic size
bank regulation
lending
balance sheet composition
JEL: 
G20
G21
G28
Document Type: 
Working Paper

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