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Bank‐level and country‐level determinants of bank capital structure and funding sources

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Publication details

JournalInternational Journal of Finance and Economics
DateAccepted/In press - 20 Jun 2018
DateE-pub ahead of print (current) - 30 Jul 2018
Issue number4
Number of pages29
Pages (from-to)504-532
Early online date30/07/18
Original languageEnglish


We examine the determinants of capital structure and funding sources of 347
large global banks between 1998 and 2016 from 57 countries around the world.
We find that the capital structure of banks does not evolve only as a result of
capital regulations, it is also affected by market forces. We find that bank capital
structure corresponds to corporate finance theory and buffer view and, in
particular, that market‐to‐book ratio, size, and risk are positively related and
that profitability is negatively related to bank leverage. Banks in countries with
higher tax advantages, creditor rights, deposit insurance, and bankruptcy codes
have more leverage, and those bound by common law have less leverage. Size
and country‐level factors are important determinants of sources of financing

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© 2018 John Wiley & Sons, Ltd. This is an author-produced version of the published paper. Uploaded in accordance with the publisher’s self-archiving policy. Further copying may not be permitted; contact the publisher for details.

    Research areas

  • capital structure, crisis, deposit/nondeposit financing, global banks, speed of adjustment

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