<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>This research aims to investigate the influence of bank capital, risk-based capital and bank capital buffers on the behaviour of bank risk-taking by applying GMM on the data of US commercial banks ranges from 2002 to 2018. The findings show that bank capital has a positive influence on total risk. However, risk-based capital and capital buffer have a negative impact on total risk. In addition, the results showed that the relationship between bank asset risk and bank capital, risk-based capital and a capital buffer is negative in pre, amid and post-crisis periods. The findings also reveal that the result of bank capital, risk-based capital and a capital buffer is not similar in case of well, adequately, under, significantly under, and critically undercapitalized banks. Our conclusions have numerous implications for policymakers and regulators in the banking sector.</p>
</abstract>

This research aims to investigate the influence of bank capital, risk-based capital and bank capital buffers on the behaviour of bank risk-taking by applying GMM on the data of US commercial banks ranges from 2002 to 2018. The findings show that bank capital has a positive influence on total risk. However, risk-based capital and capital buffer have a negative impact on total risk. In addition, the results showed that the relationship between bank asset risk and bank capital, risk-based capital and a capital buffer is negative in pre, amid and post-crisis periods. The findings also reveal that the result of bank capital, risk-based capital and a capital buffer is not similar in case of well, adequately, under, significantly under, and critically undercapitalized banks. Our conclusions have numerous implications for policymakers and regulators in the banking sector.

How Do Bank Capital and Capital Buffer Affect Risk: Empirical Evidence from Large US Commercial Banks

Journal of Central Banking Theory and Practice

This work is licensed under the Creative Commons Attribution 4.0 International License.

This research aims to investigate the influence of bank capital, risk-based capital and bank capital buffers on the behaviour of bank risk-taking by applying...

How Do Bank Capital and Capital Buffer Affect Risk: Empirical Evidence from Large US Commercial Banks

Data publikacji: 12 maj 2021

Zakres stron: 109 - 131

Otrzymano: 15 gru 2019

Przyjęty: 28 kwi 2020

DOI: https://doi.org/10.2478/jcbtp-2021-0016

Słowa kluczowe
Bank capital, Total Risk-Based Bank capital, Capital Buffers, Total Risk and Asset Risk

© 2021 Faisal Abbas et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

How Do Bank Capital and Capital Buffer Affect Risk: Empirical Evidence from Large US Commercial Banks

Data publikacji: 12 maj 2021

Zakres stron: 109 - 131

Otrzymano: 15 gru 2019

Przyjęty: 28 kwi 2020

DOI: https://doi.org/10.2478/jcbtp-2021-0016

Słowa kluczoweBank capital, Total Risk-Based Bank capital, Capital Buffers, Total Risk and Asset Risk

© 2021 Faisal Abbas et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Słowa kluczowe
Bank capital, Total Risk-Based Bank capital, Capital Buffers, Total Risk and Asset Risk