The project Financial behaviour of banks under the influence of banking regulation and political factors aims at analyzing the capital and payout policy of German banks in greater detail. First of all it is examined to what extent banking regulation influences banks capital policy. Previous studies for other countries have shown that weakly capitalized banks increase their regulatory capital stronger than other banks in order to stay above the regulatory minimum. This result is to be verified for the special German banking sector. Great store is set on potential differences between the three banking groups of savings banks, credit cooperatives and other banks due to institutional differences. Within the context of a survey, insights into the motivation behind the capital decisions are to be gained, which could not be discovered by statistical analysis.Finallly, the savings banks payout policy as a counterpart to the capital policy is examined in more detail. Rather few savings banks distribute profits to their Gewährträger, as they need to accumulate profits to finance their asset growth. Consequently, as a rule only financially strong savings banks distribute profits. In view of local authorities being short of money even pressure from the Gewährträger could have some influence on the payout decision. For the econometric analysis of the payout policy therefore also the financial situation of the local authorities will be considered.
Discussion and Working Papers
Kleff, Volker and Martin Weber (2005), Payout Policy and Owners’ Interests – Evidence from German Savings Banks, ZEW Discussion Paper No. 05-59, Mannheim. Download