Bank's capital structure under non-diversifiable risk

研究成果: Article査読

抄録

The aim of this paper is to study the design of optimal capital structure of a "large" intermediary when the intermediary faces a non-diversifiable risk, within the standard costly-state-verification (CSV) model. I demonstrate that, under weaker conditions, a "large" intermediary realizes more efficient allocation by issuing both debt and equity than by issuing only debt. Unlike Diamond (1984) and Williamson (1986), the set of optimal contracts involves ex ante monitoring made by shareholders of the intermediary. Changes in parameters, such as the variance of the aggregate risk or the cost of monitoring, affect bankruptcy costs and the capital structure.

本文言語English
ページ(範囲)29-45
ページ数17
ジャーナルEconomic Theory
20
1
DOI
出版ステータスPublished - 2002 8 1
外部発表はい

ASJC Scopus subject areas

  • 経済学、計量経済学

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