Federal Reserve Bank of Cleveland
Working Papers (Old Series)
Regulatory taxes, investment, and financing decision for insured banks
An investigation of the effects of interest rate and credit risk on optimal capital structure and investment decisions. The authors show that with no uncertainty in interest rates, capital regulation will reduce the risk of the bank's assets, but that under interest rate uncertainty, the impact of regulation may be detrimental and raise the risk of the deposits as well as government subsidies to the bank's shareholders.
Cite this item
Anlong Li & Peter H. Ritchken & L. Sankarasubramanian & James B. Thomson, Regulatory taxes, investment, and financing decision for insured banks, Federal Reserve Bank of Cleveland, Working Papers (Old Series) 9303, 1993.
Keywords: Bank capital ; Deposit insurance
This item with handle RePEc:fip:fedcwp:9303
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