How does capital affect bank performance during financial crises? Academic Article

abstract

• This paper empirically examines how capital affects a bank's performance (survival and market share) and how this effect varies across banking crises, market crises, and normal times that occurred in the US over the past quarter century. We have two main results. First, capital helps small banks to increase their probability of survival and market share at all times (during banking crises, market crises, and normal times). Second, capital enhances the performance of medium and large banks primarily during banking crises. Additional tests explore channels through which capital generates these effects. Numerous robustness checks and additional tests are performed. 2013 Elsevier B.V.

authors

• Bouwman, Christa

published proceedings

• Journal of Financial Economics

altmetric score

• 6.75

author list (cited authors)

• Berger, A. N., & Bouwman, C.

citation count

• 881

complete list of authors

• Berger, Allen N||Bouwman, Christa HS

publication date

• January 2013

publisher

• Elsevier  Publisher

published in

• Journal of Financial Economics  Journal

keywords

• Banking
• Financial Crises
• Liquidity Creation
• Market Share
• Profitability
• Survival

Digital Object Identifier (DOI)

• 10.1016/j.jfineco.2013.02.008

start page

• 146

end page

• 176

volume

• 109

issue

• 1

URL

• http%3A%2F%2Fdx.doi.org%2F10.1016%2Fj.jfineco.2013.02.008