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Testing for the underlying dynamics of bank capital buffer and performance nexus
journal contribution
posted on 2023-06-09, 13:31 authored by Emmanuel Mamatzakis, Anachit BagntasarianThis paper reveals the underlying dynamics between the capital buffer and bank performance in EU-27 countries. A dynamic panel analysis shows that capital buffer is significantly affected by bank performance and risk exposure. Remarkably, a threshold analysis identifies regime changes for the underlying relationships during the financial crisis of 2008. We find a positive relationship between the capital buffer and performance for banks that fall in the low performance regime, while a negative relationship is reported for the banks that belong to the high regime. Threshold results also show that buffer exerts a positive impact on bank performance. Although regulation reforms that aim to raise the capital requirements could improve bank performance and stability, these improvements are not homogeneous across banks.
History
Publication status
- Published
File Version
- Accepted version
Journal
Review of Quantitative Finance and AccountingISSN
0924-865XPublisher
Springer VerlagExternal DOI
Issue
2Volume
52Page range
347-380Department affiliated with
- Accounting and Finance Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2018-05-29First Open Access (FOA) Date
2019-03-06First Compliant Deposit (FCD) Date
2018-05-28Usage metrics
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