“…All listed papers—except Babihuga and Spaltro () —use multivariate panel estimation models in their funding cost equations. Aymanns, Caceres, Daniel, and Schumacher (); Babihuga and Spaltro () and Gambacorta and Shin () use capital ratios as their solvency coefficient while Annaert, De Ceuster, Van Roy, and Vespro () and Hasan, Liu, and Zhang () use leverage to investigate its effect on funding costs. However, all five papers show a negative relationship between solvency and funding costs.…”