Capital Replenishment and Credit Supply: Empirical Evidence from Banks’ Issuance of Perpetual Bonds
- DOI
- 10.2991/978-94-6463-770-0_49How to use a DOI?
- Keywords
- Bank perpetual bond; Capital replenishment; Bank credit; Enterprise loan
- Abstract
Commercial banks are crucial in serving the real economy, with bank capital as the foundation. However, strict regulations and the need to bring off- balance-sheet activities back on-balance-sheet pose challenges. This makes it hard for banks to achieve “regulatory stability” and “steady growth” simultaneously, impeding monetary policy transmission. In 2019, the central bank supported banks in issuing perpetual bonds to replenish other Tier 1 capital and created the CBS tool. Using data from 2015–2022 on banks’ perpetual bond issuance and bank and enterprise financial reports, and applying the multi-period difference-in-differences method, this paper finds that banks’ issuance of perpetual bonds significantly boosts bank credit growth and corporate lending. The effects are more evident for weaker banks and stronger enterprises.
- Copyright
- © 2025 The Author(s)
- Open Access
- Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.
Cite this article
TY - CONF AU - Hao Gao PY - 2025 DA - 2025/06/26 TI - Capital Replenishment and Credit Supply: Empirical Evidence from Banks’ Issuance of Perpetual Bonds BT - Proceedings of the 2025 3rd International Conference on Digital Economy and Management Science (CDEMS 2025) PB - Atlantis Press SP - 429 EP - 435 SN - 2352-5428 UR - https://doi.org/10.2991/978-94-6463-770-0_49 DO - 10.2991/978-94-6463-770-0_49 ID - Gao2025 ER -