How do banks implement the capital regulation requirement?

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F70883521%3A28120%2F18%3A63519724" target="_blank" >RIV/70883521:28120/18:63519724 - isvavai.cz</a>

Result on the web

<a href="http://dx.doi.org/10.14254/2071-8330.2018/11-3/14" target="_blank" >http://dx.doi.org/10.14254/2071-8330.2018/11-3/14</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.14254/2071-8330.2018/11-3/14" target="_blank" >10.14254/2071-8330.2018/11-3/14</a>

Result language

angličtina

Original language name

How do banks implement the capital regulation requirement?

Original language description

This paper studies the capital regulation implementation by commercial banks. Specifically, the authors examine how commercial banks achieve the required capital regulation requirements in the context of the Basel regulation frameworks and whether this compliance promotes banks’ efficiency. The authors use partial adjustment models to analyse the banks’ quarterly financial statement releases in both pre- and post-regulation periods. On average, the empirical evidence shows that the commercial banks pursued credit growth at a higher priority than capital regulation requirements. Retained earnings and risk-weighted assets are permutations to account for the bulk of both higher risk-weighted capital ratio and capital-to-total-assets ratio, while the shares’ issuance played a lesser role. In the post-regulation period, the banks adjusted to the risk-weighted capital target faster than in the pre-regulation period. Adjustment to the capital-on-total-assets ratio was slower. The authors find that the manner of the adjustment by these commercial banks to the capital target led to a loss in efficiency. The result implies the need to tighten the capital regulation implementation and improve risk-weighted assets management.

Czech name

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Czech description

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Type

J_SC - Article in a specialist periodical, which is included in the SCOPUS database

CEP classification

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OECD FORD branch

50204 - Business and management

Project

—

Continuities

S - Specificky vyzkum na vysokych skolach

Publication year

2018

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Journal of International Studies

ISSN

2071-8330

e-ISSN

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Volume of the periodical

11

Issue of the periodical within the volume

3

Country of publishing house

PL - POLAND

Number of pages

14

Pages from-to

161-175

UT code for WoS article

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EID of the result in the Scopus database

2-s2.0-85054602312