Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/208267
Authors: 
Behn, Markus
Daminato, Claudio
Salleo, Carmelo
Year of Publication: 
2019
Series/Report no.: 
ECB Working Paper 2233
Abstract: 
We develop a dynamic structural model of bank behaviour that provides a microeconomic foundation for bank capital and liquidity structures and analyses the effects of changes in regulatory capital and liquidity requirements as well as their interaction. Our findings suggest that adjustments in both types of requirements can have an impact on loan supply, with considerable heterogeneity across banks and over time. The model illustrates that banks' reactions depend on initial balance sheet conditions and reconciles evidence on short-term reductions in loan supply with findings suggesting that better capitalized banks are better able to lend in the medium- to long-term.
Subjects: 
bank regulation
capital structure
liquidity structure
structural model
JEL: 
G21
G28
G32
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-3495-4
Document Type: 
Working Paper

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