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Regulatory changes and the cost of capital for banks
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| Authors and Corporations: | , |
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| Other Authors: | Van Tassel, Peter [Author] |
| Type of Resource: | E-Book |
| Language: | English |
| published: | |
| Series: |
Federal Reserve Bank of New York: Staff reports ; no. 854 (June 2018)
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| Subjects: | |
| Source: | Verbunddaten SWB Lizenzfreie Online-Ressourcen |
| Summary: | We estimate the cost of capital for the banking industry and find that while the cost of capital soared for banks in the financial crisis, after the passage of the Dodd-Frank Act, the value-weighted cost of capital for banks fell differentially more than did the cost of capital for nonbanks. The very largest banks drive the decline in expected returns. Over a longer time horizon, the cost of capital for banks may be differentially higher than that for nonbanks relative to the time period before the Graham-Leach-Bliley Act was passed, although in some measures the difference is negative and/or cannot be distinguished from zero. We find some evidence that stress testing has lowered the cost of capital for the largest stress-tested banks, although not for those added more recently to stress testing. |
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| Physical Description: | 1 Online-Ressource (circa 56 Seiten); Illustrationen |