“…The effect of bank capital on bank-lending has been widely debated since the 1988 Basel accord (Bernanke and Lown, 1991;Berger and Udell, 1994;Rosengren, 1997, 2000;Kishan and Opiela, 2000;Gambacorta and Mistrulli, 2004;Berrospide and Edge, 2010;Beatty and Liao, 2011;Carlson et al, 2013;Bridges et al, 2014;Labonne and Lame 2014;Olszak et al, 2014;Kosak et al, 2015). Although some previous studies confirm that regulatory capital ratios behave similarly to equity ratio (Craig et al, 2006), Gambacorta and Marques-Ibanez (2011) and Chernykh and Cole (2015) show that regulatory capital ratios may be more accurate in measuring solvency.…”