We investigate the impact of changes in capital of European banks on their risk-taking behavior from 1992 to 2006, a time period covering the Basel I capital requirements. We specifically focus on the initial level and type of regulatory capital banks hold. First, we assume that risk changes...

We empirically investigate whether a bank's decision to recapitalize is influenced by the separation between voting and cash-flow rights of the ultimate owner. We use a novel dataset on bank ultimate control and ownership structure of 442 European commercial banks to estimate an...

The recent implementation of the Basel III framework has re-ignited the debate around the link between capital, performance and regulatory capital requirements in the banking sector. There is a dominant view in the earlier empirical literature in favor of a positive effect of capital on banking...