Abstract
AbstractIn non‐financial firms, higher risk taking results in lower dividend payout ratios. In banking, public guarantees may result in a positive relationship between dividend payout ratios and risk taking. I investigate the interplay between dividend payout ratios and bank risk‐taking allowing for the effect of charter values and capital adequacy regulation. I find a positive relationship between bank risk‐taking and dividend payout ratios. Proximity to the required capital ratio and a high charter value reduce the impact of bank risk‐taking on the dividend payout ratio. My results are robust to different proxies for the dividend payout ratio and bank risk‐taking.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.