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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/27372
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| Title: | Risk Management, Capital Structure and Capital Budgeting in Financial Institutions |
| Authors: | Cebenoyan, A. Sinan
Strahan, Philip E. |
| Issue Date: | 27-Sep-2000 |
| Series/Report no.: | FIN-00-044 |
| Abstract: | We test how active management of bank credit risk exposure affects
capital structure, capital budgeting and profits. We find that banks
that rebalance their C&I loan portfolio exposures by both buying and
selling loans hold less capital and lower levels of liquid assets than
other banks; they also lend more to businesses, both as a percentage of
total assets and as a percentage of their overall lending, and they
enjoy higher profits. The results hold controlling for bank size and
holding company affiliation and are robust over time. We conclude that
increasingly sophisticated risk management practices in banking are
likely to improve the availability of bank credit. |
| URI: | http://hdl.handle.net/2451/27372 |
| Appears in Collections: | Finance Working Papers
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