Influence of Regulatory Capital Requirements on the Self-Financing Capacity of a Banking Company

• Autorzy: Ivica Klinac , Anita Peša , Berislav Bolfek
• Języki publikacji: EN

Abstrakty

EN

This paper explores activities of the banking companies in the new regulatory environment of the European banking system. For this purpose, the dynamic panel data models are estimated by utilizing the system GMM estimator. The research sample consists of 35 publicly listed groups of banks operating in the period from 2000 to 2016, selected by size of assets. The chosen banking companies are unquestionably market makers on the bank-centric economy of the EU. Hence, the research is in line with other current empirical works regarding the post-Basel III Standard adjustment of the banking industry as a whole. The model results show that the required increase in capital position affects the lack of bank credit activity towards the non-financial sector. The banks can maintain the higher regulatory capital ratio and self-finance the required growth by increasing the volume of share capital. Asymmetric information about the bank's net worth discourage public investors to get into the shareholders position, which results in further bank lending constraints and reduced profitability. Potential growth of the revenue from non-credit risk operations cannot compensate for the negative pressure on the real value of the banking firm. From the policy-making perspective, the paper concludes that the resolution of structural problems of non-performing credit assets under new regulatory conditions should contribute to restoring the confidence of the investment public towards the self-financing capacity of the banking industry as well as bring the banking system back to the traditional client-oriented business model. (original abstract)

Słowa kluczowe

EN

Return on Investment (ROI); Ownership capital; Assets; Credit; Panel model; Banks

PL

Stopa zwrotu kapitału; Kapitał własny; Aktywa; Kredyt; Modele panelowe; Banki

• Czasopismo: Business and Economic Horizons
• Rocznik: 2019
• Numer: vol. 15, iss. 1
• Strony: 70--89

Twórcy

autor

Ivica Klinac

• Independent researcher, Zadar, Republic of Croatia

autor

Anita Peša

• University of Zadar, Republic of Croatia

autor

Berislav Bolfek

• University of Zadar, Republic of Croatia

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Identyfikatory

DOI

10.15208/beh.2019.5