Faculty Digital Archive

Archive@NYU >
Stern School of Business >
Salomon Center >
Credit & Debt Markets >

Please use this identifier to cite or link to this item: http://hdl.handle.net/2451/26785

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.: S-CDM-00-10
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/2451/26785
Appears in Collections:Credit & Debt Markets

Files in This Item:

File Description SizeFormat
S-CDM-00-10.pdf79.06 kBAdobe PDFView/Open

Items in Faculty Digital Archive are protected by copyright, with all rights reserved, unless otherwise indicated.


The contents of the FDA may be subject to copyright, be offered under a Creative Commons license, or be in the public domain.
Please check items for rights statements. For information about NYU’s copyright policy, see http://www.nyu.edu/footer/copyright-and-fair-use.html 
Valid XHTML 1.0 | CSS