Liquidity and capital in bank lending: Evidence from European banks

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Liquidity and capital in bank lending: Evidence from European banks. / Thornton, John; Di Tommaso, Caterina.
In: Finance Research Letters, Vol. 34, 101273, 05.2020.

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Thornton J, Di Tommaso C. Liquidity and capital in bank lending: Evidence from European banks. Finance Research Letters. 2020 May;34:101273. Epub 2019 Aug 27. doi: 10.1016/j.frl.2019.08.021

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Thornton, John ; Di Tommaso, Caterina. / Liquidity and capital in bank lending: Evidence from European banks. In: Finance Research Letters. 2020 ; Vol. 34.

RIS

TY - JOUR

T1 - Liquidity and capital in bank lending: Evidence from European banks

AU - Thornton, John

AU - Di Tommaso, Caterina

PY - 2020/5

Y1 - 2020/5

N2 - We examine whether the effect of bank capital on credit growth differs depending upon the level of liquidity in a panel of up to 521 banks from 21 European countries. We find that the effect of an increase in bank capital is positively associated with the level of bank liquidity, suggesting that capital exerts a significantly positive effect on European banks’ credit growth after they retain sufficient liquid funds.

AB - We examine whether the effect of bank capital on credit growth differs depending upon the level of liquidity in a panel of up to 521 banks from 21 European countries. We find that the effect of an increase in bank capital is positively associated with the level of bank liquidity, suggesting that capital exerts a significantly positive effect on European banks’ credit growth after they retain sufficient liquid funds.

U2 - 10.1016/j.frl.2019.08.021

DO - 10.1016/j.frl.2019.08.021

M3 - Article

VL - 34

JO - Finance Research Letters

JF - Finance Research Letters

SN - 1544-6123

M1 - 101273

ER -