Publication detail

The Effect of Higher Capital Requirements on Bank Lending: The Capital Surplus Matters

Author(s): Mgr. Dominika Ehrenbergerová (Kolcunová) ,
PhDr. Simona Malovaná Ph.D.,
Type: IES Working Papers
Year: 2019
Number: 5
ISSN / ISBN:
Published in: IES Working Papers 5/2019
Publishing place: Prague
Keywords: Bank lending, banks’ capital surplus, regulatory capital requirements
JEL codes: C22, E32, G21, G28
Suggested Citation: Kolcunova D. and Malovana S. (2019): "The Effect of Higher Capital Requirements on Bank Lending: ThevCapital Surplus Matters" IES Working Papers 5/2019. IES FSV. Charles University.
Abstract: This paper studies the impact of higher additional capital requirements on loan growth to private sector of banks in the Czech Republic. The empirical results indicate that there is a negative effect of higher additional capital requirements on loan growth of banks with relatively low capital surplus. In addition, the results confirm that the relationship between capital surplus and loan growth is important also in the period of stable capital requirements, i.e. it does not serve only as an intermediate channel of higher additional capital requirements.
Downloadable: wp_2019_05_kolcunova_malovana

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