On Thu, 2009-12-17 at 16:25 -0800, Jim Devine wrote: > (2) higher bank equity prices --> more net worth, so given a constant > leverage ratio (bank capital/assets), there are more loans (which are > bank assets).
Unless I'm mistaken higher bank equity prices doesn't translate to more bank capital as used for prudential ratios: the bank has to emit new shares to get more capital (which is of course somewhat easier in a bull market). In France the terms used are "capital social" for real legal capital (money that really came in) et "capitalisation boursiere" for number of shares multiplied by share price (something completely virtual), I'm not sure what are the US equivalent terms. Laurent _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
