English  |  正體中文  |  简体中文  |  Items with full text/Total items : 55025/89277 (62%)
Visitors : 10607149      Online Users : 33
RC Version 7.0 © Powered By DSPACE, MIT. Enhanced by NTU Library & TKU Library IR team.
Scope Tips:
  • please add "double quotation mark" for query phrases to get precise results
  • please goto advance search for comprehansive author search
  • Adv. Search
    HomeLoginUploadHelpAboutAdminister Goto mobile version
    Please use this identifier to cite or link to this item: http://tkuir.lib.tku.edu.tw:8080/dspace/handle/987654321/115023


    Title: Bank interest margin, multiple shadow banking activities, and capital regulation
    Authors: Jyh-Horng Lin;Shi Chen;Fu-Wei Huang
    Keywords: wealth management products;entrusted loans;bank interest margin;capital regulation
    Date: 2018-07-03
    Issue Date: 2018-09-27 12:10:56 (UTC+8)
    Publisher: MDPI
    Abstract: In this paper, we develop a contingent claim model to evaluate a bank’s equity and liabilities that integrates the premature default risk conditions with loan rate-setting behavioral mode and multiple shadow banking activities under capital regulation. The barrier options theory of corporate security valuation is applied to the contingent claims of a bank. The barrier reports that default can occur at any time before the maturity date. We focus on a type of earning-asset portfolio, consisting of balance-sheet banking activities of loans and liquid assets and shadow banking activities of wealth management products (WMPs) and entrusted loans (ELs). The optimal bank interest margin, i.e., the spread between the loan rate and the deposit rate, is derived and analyzed. The results provide an alternative explanation for the decline in bank interest margins, which better fits the narrative evidence on bank spread behavior under capital regulation in particular during a financial crisis. Raising either WMPs or ELs leads to a transfer of wealth from equity holders to the debt holders, and hence increases the deposit insurance liabilities. We also show that the multiple shadow banking activities of WMPs and ELs captured by scope equities may produce superior return performance for the bank. Tightened capital requirements may reinforce the superior return performance by a surge in shadow banking activities that makes the bank less prudent and more prone to risk-taking at a reduced margin, thereby adversely affecting banking stability. We demonstrate that financial disturbance may be created because of the potential for shadow banking activities to spill over to regular banking activities and damage the real economy.
    Relation: International Journal of Financial Studies 6(3), p.63
    DOI: 10.3390/ijfs6030063
    Appears in Collections:[Graduate Institute & Department of International Business] Journal Article

    Files in This Item:

    File Description SizeFormat
    Bank interest margin, multiple shadow banking activities, and capital regulation.pdf325KbAdobe PDF0View/Open
    index.html0KbHTML60View/Open

    All items in 機構典藏 are protected by copyright, with all rights reserved.


    DSpace Software Copyright © 2002-2004  MIT &  Hewlett-Packard  /   Enhanced by   NTU Library & TKU Library IR teams. Copyright ©   - Feedback