How do Asian banks make capital structure decisions when banks are opaque

What is it about?

This studies Asian banks to see how banks make capital structure decisions in the presence of varying levels of information asymmetry between the bank and its stakeholders. Maintaining lower capital levels is risky and this paper finds that when banks are opaque and the stakeholders can not access them they tend to keep lower than optimal levels of capital.

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Why is it important?

The study is important because it suggests that countries where banks are more opaque need to have stronger capital requirements when more regulatory oversight