The effects of declining capitalization on equity acquisition by commercial banks
Article Abstract:
A nonlinear relationship exists between equity acquisition and a bank's level of capitalization, wherein equity acquisition increases as capitalization decreases until a threshold level of undercapitalization is reached, below which equity acquisition drops. Current or prospective shareholders consider it unworthy to invest in banks that fall below the threshold level of capital. This is because they may interpret the banks' failure to acquire external equity as an indicator of potential nonviability.
Publication Name: Journal of Banking & Finance
Subject: Business
ISSN: 0378-4266
Year: 1996
User Contributions:
Comment about this article or add new information about this topic:
Ownership changes and lending at minority banks: a note
Article Abstract:
A survey of 34 banks that have changed status from non-minority to minority ownership and vice versa for the 1983-1991 period shows that lending, and consequently, corporate growth has been slower in the first set of banks. This observation takes into account capitalization and physical site of the bank. It possibly supports the opinion that minority bankers are more conservative in their marketing approach.
Publication Name: Journal of Banking & Finance
Subject: Business
ISSN: 0378-4266
Year: 1996
User Contributions:
Comment about this article or add new information about this topic:
Prompt corrective action and bank efforts to recover from undercapitalization
Article Abstract:
The efforts of banks to recover from positions of undercapitalization are studied. Results show that growth limitations or divided restrictions are ineffective in helping banks to recover from undercapitalization. The effect of profitability on recovery increases with the length of undercapitalization. Equity fusion is also the most common means used by banks to recapitalize.
Publication Name: Journal of Banking & Finance
Subject: Business
ISSN: 0378-4266
Year: 1995
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: The limits of financial globalization. Christmas is coming. Progress or perish?
- Abstracts: The effect of uncertainty and asset co-specialization on governance in biotechnology alliances
- Abstracts: The effect of camera viewing angle on posture assessment repeatability and cumulative spinal loading. The effects of lumbar massage on muscle fatigue, muscle oxygenation, low back discomfort, and driver performance during prolonged driving
- Abstracts: The attractions of UK equities. Preparing for the coming battle. Satisfaction not guaranteed
- Abstracts: The effects of ownership structure on conditions at the top: the case of CEO pay raises. Chief executive compensation: a synthesis and reconciliation