Nothing Special About Banks: Competition and Bank Lending in Britain, 1885-1925

Braggion, Fabio; Dwarkasing, Narly; Moore, Lyndon

doi:10.2139/ssrn.2669407

Cited by 2 publications

(1 citation statement)

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“…We then extended the coverage of the data series using data for the same set of banks in France, Germany, Switzerland and the UK. Our additional data is based on balance sheets published in annual reports of the institutions (for Germany, excluding the hyperinflation years, and for France from 1872-1889), from the Swiss National Bank (after 1971), and from Braggion et al (2017) for the identical set of banks in the UK from 1885 to 1889. From these data we construct a weighted capital ratio of the largest banks and rerun the empirical analysis by estimating logit classification models for systemic financial crises.…”

Section: Capitalization Of the Largest Banksmentioning

confidence: 99%

Bank Capital Redux: Solvency, Liquidity, and Crisis

Jordà

Richter

Schularick

et al. 2017

ERWP

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Higher capital ratios are unlikely to prevent a financial crisis. This is empirically true both for the entire history of advanced economies between 1870 and 2013 and for the post-WW2 period, and holds both within and between countries. We reach this startling conclusion using newly collected data on the liability side of banks' balance sheets in 17 countries. A solvency indicator, the capital ratio has no value as a crisis predictor; but we find that liquidity indicators such as the loan-to-deposit ratio and the share of non-deposit funding do signal financial fragility, although they add little predictive power relative to that of credit growth on the asset side of the balance sheet. However, higher capital buffers have social benefits in terms of macro-stability: recoveries from financial crisis recessions are much quicker with higher bank capital.

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Section: Capitalization Of the Largest Banksmentioning

confidence: 99%