A general equilibrium theory of banks' capital structure

• 成果类型: Article
• 署名作者: Gale, Douglas; Gottardi, Piero
• 署名单位: New York University; University of Essex; Universita Ca Foscari Venezia; Centre for Economic Policy Research - UK; New York University; University of Essex
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2020.104995
• 发表日期: 2020
• 关键词: capital structure; Bank financing; liquidity; Bankruptcy costs; Banks firms linkages

摘要

We develop a general equilibrium theory of the capital structures of banks and firms. The liquidity services of bank deposits make deposits a cheaper source of funding than equity. In equilibrium, banks pass on part of this funding advantage in the form of lower interest rates to firms that borrow from them. Firms and banks choose their capital structures to balance the benefits of debt financing against the risk of costly default. An increase in the equity of a firm makes its debt less risky and that in turn reduces the risk of the banks who lend to the firm. Hence there is some substitutability between firm and bank equity. We find that firms have a comparative advantage in providing a buffer against systemic shocks, whereas banks have a comparative advantage in providing a buffer against idiosyncratic shocks. (C) 2020 Elsevier Inc. All rights reserved.