A Theory of Bank Capital

By Douglas W. Diamond, Raghu Rajan. 2000

1,594 citations recorded by the source corpus.

Subfields: Accounting, Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/785da33784a8d4ad0e8e07a6c94d44ea16063181

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Citations in the corpus

Loan Pricing Under Basel Capital Requirements (2004, methodology): “The bank’s objective function (5) then becomes”
Multiple-bank lending: diversification and free-riding in monitoring (2004, neutral): “For k = 1, (18) is strictly positive at D = 0, since the Envelope Theorem then holds with respect to f m.”
Banks and Liquidity (2001, background): “In the former case, we show that there is a strategic role for bank capital (see Diamond and Rajan, 2000a).”
Crisis-Related Shifts in the Market Valuation of Banking Activities (2012, neutral): “…of financing (e.g., due to tax considerations, adverse-selection costs, or agency costs – see, for example, Myers and Majluf, 1984; Calomiris and Kahn, 1991; Diamond and Rajan, 2000; Aiyar et al., 2014) higher equity-to-asset ratios may be associated with lower market-to-book values of equity.”
The theory of financial intermediation: An essay on what it does (not) explain (2003, background): “Diamond and Rajan (2000) show that bank capital affects bank safety, the bank’s ability to refinance, and the bank’s ability to extract repayment from borrowers or its willingness to liquidate them.”
The Fragile Capital Structure of Hedge Funds and the Limits to Arbitrage (2011, neutral): “In line with Diamond and Rajan (2000, 2001), only incumbent investors having one period of experience can monitor the fund manager or understand the true performance of the fund. The new investors cannot. Mitchell and Pulvino (2010) nd empirical evidence supporting this assumption.”
Monetary policy and risk taking (2015, methodology): “Following Diamond and Rajan ([23], [24], we assume the bank manager maximizes the combined expected return of depositors and bank capitalists, in exchange for a fee.”