Capital policy of German savings banks: a survey

In contrast to earlier field studies, we survey German public savings banks on their management of capital. We find that the most important determinants of the savings banks? target capital ratio are risk aversion, the desired credit growth and profitability. Savings banks prefer to manage the level of capital rather than the level of riskweighted assets in order to reach their target capital ratio. The most important instruments to increase the level of capital are lowering costs and issuing subordinated debt. We obtain strong evidence that issuing subordinated debt is a particularly important instrument to increase capital for less capitalised savings banks. --Capital,Savings Banks,Germany,Survey

How Do Banks Determine Capital? Empirical Evidence for Germany

This paper examines how capital is determined by German banks. We analyse whether the determinants found in the previous empirical literature hold for the special German banking sector with its three characteristic banking groups of savings banks, cooperative banks and other banks. On the basis of a unique data set of nearly all German banks between 1992 and 2001 provided by the Deutsche Bundesbank, we apply the generalised method of moments (GMM) within a dynamic panel data framework. The results largely confirm the findings for other countries, but show considerable differences between the three German banking groups. --Bank capital,portfolio risk,banking regulation,panel data,GMM

Payout Policy and Owners? Interests: Evidence from German Savings Banks

The savings banks? decision to distribute profits among their public owners is strongly regulated by law in order to guarantee their adequate funding via retained profits. However, the legal scope is reluctantly exhausted. In this study we examine the determinants of the savings banks? payout decision in more detail. We find that besides internal determinants also external factors regarding the savings bank?s public owner have strong explanatory power. The better the financial situation of the public owner, the less likely is the savings bank to distribute profits and to increase payouts, respectively. --Savings Banks,Germany,Payout Policy

Capital Policy of German Savings Banks – A Survey

In contrast to earlier field studies, we survey German public savings banks on their management of capital. We find that the most important determinants of the savings banks' target capital ratio are risk aversion, the desired credit growth and profitability. Savings banks prefer to manage the level of capital rather than the level of riskweighted assets in order to reach their target capital ratio. The most important instruments to increase the level of capital are lowering costs and issuing subordinated debt. We obtain strong evidence that issuing subordinated debt is a particularly important instrument to increase capital for less capitalised savings banks

How Do Banks Determine Capital? Evidence from Germany

We analyse whether the determinants of capital found in the previous literature hold for the special German banking sector comprising of three characteristic banking groups including savings banks, cooperative banks and other banks, which greatly differ regarding their ownership and their access to the capital market. Through the use of accounting data from German banks between 1992 and 2001 we find evidence in accordance with the buffer theory of capital for all German banking groups. Nevertheless, we also detect some remarkable differences between the three banking groups regarding their determinantion of capital due to institutional characteristics

Payout Policy and Owners' Interests – Evidence from German Savings Banks

The savings banks' decision to distribute profits among their public owners is strongly regulated by law in order to guarantee their adequate funding via retained profits. However, the legal scope is reluctantly exhausted. In this study we examine the determinants of the savings banks' payout decision in more detail. We find that besides internal determinants also external factors regarding the savings bank's public owner have strong explanatory power. The better the financial situation of the public owner, the less likely is the savings bank to distribute profits and to increase payouts, respectively

How Do Banks Determine Capital? - Empirical Evidence for Germany

This paper examines how capital is determined by German banks. We analyse whether the determinants found in the previous empirical literature hold for the special German banking sector with its three characteristic banking groups of savings banks, cooperative banks and other banks. On the basis of a unique data set of nearly all German banks between 1992 and 2001 provided by the Deutsche Bundesbank, we apply the generalised method of moments (GMM) within a dynamic panel data framework. The results largely confirm the findings for other countries, but show considerable differences between the three German banking groups

Die Eigenkapital- und Ausschüttungspolitik deutscher Sparkassen

Deutschland ; Sparkasse ; Sparkassenrecht ; Eigenkapital ; Kapitalstruktur ; Bilanzstrukturmanagement ; Gewinnverwendun

Aspects of Payout Policy of German Savings Banks

Aspects of Payout Policy of German Savings BanksThe German savings banks' distribution of profits among their public owners (i. e. municipalities and districts) requires that legal criteria are met ensuring the banks' adequate funding via retained profits. In line with the legal framework, our analysis of savings banks in four federal states confirms that profitability and portfolio risk are important determinants of the savings banks' payout decision. Heavily indebted municipalities and districts, however, might have a strong interest in the savings banks' payouts to mitigate their financial distress. In fact, we find that the payout decision is also influenced by the public owners' interest. (G21