Bank capital management: International evidence

O.G. De Jonghe, Ö. Öztekin

Research output: Contribution to journalArticleScientificpeer-review

64 Citations (Scopus)
780 Downloads (Pure)


We examine the dynamic behavior of bank capital using a global sample of 64 countries during the 1994-2010 period. Banks achieve deleveraging through active capital management (equity growth) rather than asset liquidation. In contrast, they achieve leveraging through passive capital management (reduced earnings retention) and substantial asset expansion (but also cash hoarding). The speed of capital structure adjustment is heterogeneous across countries. Banks make faster capital structure adjustments in countries with more stringent capital requirements, better supervisory monitoring, more developed capital markets, and high inflation. In times of crises, banks adjust their capital structure significantly more quickly.
Original languageEnglish
Pages (from-to)154-177
JournalJournal of Financial Intermediation
Issue number2
Early online date19 Jan 2015
Publication statusPublished - Apr 2015


  • Bank
  • capital
  • regulation
  • international
  • speed of adjustment
  • Basel III


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