This paper investigates the relationship between bank capital ratios and lending rates using data from 1998 to 2012 for 13 large banks accounting for 75% of total UK lending. We document a substantial change in the coefficient of the Tier 1 capital ratio in reduced-form regressions for secured...

The objective of this paper is to compare, based on a theoretical framework, the value created in different banking structures. We construct a simple model to characterise a banking group that consists two different subsidiary banks. The model distinguishes safe utility subsidiary bank from...