Time: 13:00 – 15:00 (GMT), Wednesday, 28 October 2020
Presenter: Standley Réginald Baron, Laval University, Canada
Chair: Professor Victor Murinde, SOAS University of London
Online venue: Click here to join the CGF Seminar Room on Microsoft Teams

For any inquiry about how to join the online seminar, please contact Dr Meng Xie (xm1@soas.ac.uk)

Abstract
This paper analyzes the role that the cost of capital requirement could play in explaining banks’ capital ratio speed of adjustment. We find that the cost of capital requirement differences across banks is the main source of asymmetries in capital structure speed of adjustment. Specifically, banks facing higher cost of capital requirement adjust their capital ratio faster toward the target level. To achieve this result, banks use liability and asset sides as a mechanism of adjustment. However, in economic downturn banks generally decrease their tier 1 capital, which reinforces the need to hold countercyclical capital buffer to ride against the cycle.

Presenter

Standley Réginald Baron is a PhD candidate of Department of Finance, Insurance and Real Estate, Faculty of Business Administration at Laval University, supervised by Professor Issouf Soumaré. Baron’s research interests include microeconomics, econometrics, portfolio management and risk management. His current work focuses on risk management in financial institutions, the business cycle and regulation. He has published in Journal of Fixed Income and participated in research projects led by Professor Issouf Soumaré.