Does banks’ systemic importance affect their capital structure and balance sheet adjustment processes?

Frictions prevent banks to immediately adjust their capital ratio towards desired and/or imposed level. This paper analyzes (i) whether or not these frictions are larger for regulatory ratios vis-à-vis a plain leverage ratio; (ii) which adjustment channels use and (iii) how the speed of differ between large, systemic complex versus small banks. Our results, obtained using sample listed across OECD countries 2001–2012 period, bear critical policy implications implementation new (systemic risk-based) requirements impact on banks’ balance sheets, specifically lending, hence real economy.