Banks' regulatory capital buffer and the business cycle: Evidence for Germany
This paper analyzes the effect of the business cycle on the regulatory capital buffers of German local banks in the period 1993-2004. The capital buffers are found to fluctuate countercyclically over the business cycle. The evidence supports that low-capitalized banks do not catch up with their well-capitalized peers over the observation period and they do not decrease risk-weighted assets during a recession. This finding suggests that their low capitalization does not force them to retreat from lending.
Year of publication: |
2011
|
---|---|
Authors: | Stolz, Stéphanie ; Wedow, Michael |
Published in: |
Journal of Financial Stability. - Elsevier, ISSN 1572-3089. - Vol. 7.2011, 2, p. 98-110
|
Publisher: |
Elsevier |
Keywords: | Capital regulation Bank capital Business cycle fluctuations |
Saved in:
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