Excess control rights, bank capital structure adjustments, and lending

• 成果类型: Article
• 署名作者: Lepetit, Laetitia; Saghi-Zedek, Nadia; Tarazi, Amine
• 署名单位: Universite de Limoges
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2014.10.004
• 发表日期: 2015
• 页码: 574-591
• 关键词: dynamic capital structure; Bank lending; Pyramids; Excess control rights; european banking

摘要

We investigate whether excess control rights of ultimate owners in pyramids affect banks' capital ratio adjustments. When control and cash flow rights are identical, to boost capital ratios banks issue equity without cutting lending. However, when control rights exceed cash flow rights, instead of issuing equity, banks downsize by reducing lending. Such a finding is mostly prevalent in countries with weak shareholder protection or for family-controlled banks. Other factors also explain the extent to which such banks reduce lending. Our findings contribute to the capital structure adjustment literature and have critical policy implications for the implementation of Basel III and the debate on capital requirements and bank lending. (C) 2014 Elsevier B.V. All rights reserved.