Capital Structure and Credit Risk in the Czech Republic
Capital Structure and Credit Risk in the Czech Republic

Author(s): Bohuslava Doláková
Subject(s): Business Economy / Management, Economic policy, Financial Markets
Published by: Masarykova univerzita nakladatelství
Keywords: risk management; capital structure; banks; lending;
Summary/Abstract: The paper deals with the risk management being a very important concept for any business as most financial decisions revolve around the corporate cost of holding risk. This issue is particularly important to banks since risk constitutes their core business processes. This paper examines how credit risk affects a bank's capital structure, profitability and lending decisions. Banks hold private information about their borrowers that makes sales of loan difficult due to adverse selection.

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