DETERMINANTS OF BANK CAPITAL: EVIDENCE FROM THE U.S.

This paper analyses factors that affect bank capital. We use a sample of U.S. banks over the period 1996 to 2012. According to bank size, we separate the whole sample into small banks, medium banks and large banks. These three groups have different abilities to manage risks and access capital markets. To see the impact of the recent financial crisis, we further separate the whole sample into two subsamples: 1996 to 2006 and 2007 to 2012. Making use of an advanced estimation method (GMM), we find that bank capital is influenced by risk, profitability, deposits, loan loss provision, and size.