Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7408976 | Journal of Financial Stability | 2018 | 35 Pages |
Abstract
Using data on publicly traded banks in 61 countries, we examine how the institutional environment affects the relationship between bank capital and system-wide fragility. Consistent with prior studies, we find that bank capital is associated with a reduction in the systemic risk contribution of individual banks. This effect is more pronounced for banks located in countries with less efficient public and private monitoring of financial institutions and in countries with lower levels of information availability. Overall, our findings suggest that capital can act as a substitute for a weak institutional environment in reducing systemic risk.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics, Econometrics and Finance (General)
Authors
Deniz Anginer, Asli Demirgüç-Kunt, Davide S. Mare,