Liquidity and capital in bank lending: Evidence from European banks

Thornton, John and di Tommaso, Caterina (2020) Liquidity and capital in bank lending: Evidence from European banks. Finance Research Letters, 34. ISSN 1544-6123

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Abstract

We examine whether the effect of bank capital on credit growth differs depending upon the level of liquidity in a panel of up to 521 banks from 21 European countries. We find that the effect of an increase in bank capital is positively associated with the level of bank liquidity, suggesting that capital exerts a significantly positive effect on European banks’ credit growth after they retain sufficient liquid funds.

Item Type: Article
Uncontrolled Keywords: bank capital, liquidity, lending behavior, european banks
Faculty \ School: Faculty of Social Sciences > Norwich Business School
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Depositing User: LivePure Connector
Date Deposited: 28 Aug 2019 08:31
Last Modified: 21 Sep 2020 23:56
URI: https://ueaeprints.uea.ac.uk/id/eprint/72060
DOI: 10.1016/j.frl.2019.08.021

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