Maintaining adequate bank capital: An empirical analysis of the supervision of European banks

Flannery, Mark J.; Giacomini, Emanuela

doi:10.1016/j.jbankfin.2015.06.008

Cited by 33 publications

(17 citation statements)

References 43 publications

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“…Higher Tier 1 ratio does not seem to be a selective factor for investors over the whole sample period. This evidence is in line with some literature which points out that book equity measures do not capture the banks' true ability to absorb losses (see Flannery & Giacomini, 2015).…”

Section: Data and Empirical Methodologysupporting

confidence: 91%

Bail‐in rules and the pricing of Italian bank bonds

Crespi

Giacomini

Mascia

2019

Euro Fin Management

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We analyze whether the introduction of the bail‐in tool in January 2016 affected the pricing of Italian bank bonds. Using a unique dataset of 1,798 fixed‐rate bonds issued during the period 2013–2016, we find an increase of the spread at issuance of bail‐inable bonds compared to non‐bail‐inable bonds. This increase also depends on the intrinsic characteristics of each bank. Large institutions, banks with lower ratings, profitability, capitalization, and higher liquidity faced a higher cost of issuing bail‐inable bonds. Overall, our results seem to support the hypothesis of an improved market discipline for the bank bond primary market.

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Section: Data and Empirical Methodologysupporting

confidence: 91%

Bail‐in rules and the pricing of Italian bank bonds

Crespi

Giacomini

Mascia

2019

Euro Fin Management

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“…The issuance of new equity shares is suggested to be the least attractive option to increase regulatory capital due to the tendency to impair the market value of old equity shares (Cohen & Scatigna, 2016;Stewart Myers & Majluf, 1984). This may spark concern considering that in the case of distributions only the initial equity capital serves as a buffer against default (Flannery & Giacomini, 2015).…”

Section: Bank Regulatory Capitalmentioning

confidence: 99%

Between Prudential Regulation and Shareholder Value: An Empirical Perspective on Bank Shareholder Equity (2001-2017)

Biondi

Graeff²

2020

Accounting, Economics, and Law: A Convivium

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We analyse the effects of changes in regulatory capital requirements under Basel III on the dynamic evolution of bank shareholder equity over time. Evidence from managerial and regulatory reports shows that bank shareholder equity stands between micro-prudential regulatory capital requirements and managerial pursuit of equity economising strategies. Shareholder value strategies see shareholders as the equity investment remuneration recipients. Micro-prudential regulators, in turn, address them as equity investment providers. With opposing cash streams, one orientation puts the other to a test. The article visualises this conflict by analysing the actual shareholder contribution to the bank equity position in nine case studies of European financial institutions between 2001 and 2017; our evidence-based financial analysis applies an innovative method to data directly extracted from financial statements, in order to measure this equity position evolution and assess bank equity dynamics in light of revised regulatory capital requirements and persistent assurance of shareholder value thriving in managerial reports. The choice of in-depth analysis of a sample of relevant case studies overcomes the absence of detailed data on changes in bank equity in existing databases.

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“…It should be noted that the number of banks for each country in my sample is quite similar to that of Beltratti and Stulz (2012). 6 Following Chang et al (2008), Banker et al (2010), Festić et al (2011), andMayordomo et al (2014), I measure the non-performing loans ratio as the ratio of non-performing loans to total loans (NPLTL) As an alternative measure of non-performing loans, I use the ratio of non-performing loans to total assets (NPLTA), which is used in recent studies such as Flannery and Giacomini (2015).…”

Section: Retrieve Annual Bank-level Financial Data Over the Sample Period From Thomson Reutersmentioning

confidence: 99%

The Consequences of Bank Loan Growth: Evidence from Asia

Vithessonthi

2016

SSRN Journal

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Maintaining adequate bank capital: An empirical analysis of the supervision of European banks

Cited by 33 publications

References 43 publications

Bail‐in rules and the pricing of Italian bank bonds

Bail‐in rules and the pricing of Italian bank bonds

Between Prudential Regulation and Shareholder Value: An Empirical Perspective on Bank Shareholder Equity (2001-2017)

The Consequences of Bank Loan Growth: Evidence from Asia

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