Search Results
Report
How Do Banks Build Equity Capital?
We examine the evolution of equity capital in the U.S. banking industry over the past thirty-five years. Earnings are the major driver of increases in equity capital in the banking industry. While common stock issuance is frequent, amounts issued are generally small and do not contribute meaningfully to equity capital growth in most cases. Common stock dividends and repurchases are significant drains on equity capital. It is not uncommon for banks to pay out more than they earn, driven both by capital planning motivations and negative shocks to earnings. It is also common for banks to both ...
Discussion Paper
Behind the ATM: Exploring the Structure of Bank Holding Companies
Many modern banking organizations are highly complex. A “bank” is often a larger structure made up of distinct entities, each subject to different regulatory, supervisory, and reporting requirements. For researchers and policymakers, understanding how these institutions are structured and how they have evolved over time is essential. In this post, we illustrate what a modern financial holding company looks like in practice, document how banks’ organizational structures have changed over time, and explain why these details matter for conducting accurate analyses of the financial system.