I think the following papers will help you out in this regard:

Loan sales and the cost of bank capital

GG Pennacchi - The Journal of Finance, 1988 - Wiley Online Library

Bank-specific, industry-specific and macroeconomic determinants of bank profitability

PP Athanasoglou, SN Brissimis, MD Delis - Journal of international financial …, 2008 - Elsevier

In a fiat monetary system like ours, the artistry of accounting matters: the banking collateral for loans is principally the quantity of land value (real estate, natural resources) that is booked as collateral for the loan. However, this is not capital (stock), but land (value). Capital as traded in stock markets is based on this accounting technique, since Sumer and Babylon. All issued monetary units are based on land value or thin air, call it gambling ingenuity or fraud. You need a good Geiger counter to distinguish that; take a look at Lehmann Brothers. It was an a-posteriori blow-up; too big to fail did not apply.

Bank loans are not closely related to bank capital except for a percentage of more risky loans that might fail. The failed loan comes out of bank capital or threatens to do so and may require the bank to raise more capital under unfavorable prices and sell collateral in depressed markets.

Bank deposits are more closely related to loans. The bank must retain a percentage of reserves in cash equivalents, sometimes 33%. It doesn't mean that only 67% of a deposit can be loaned out. It means the deposit can be kept 100% as reserve and the bank can write loan checks for another 200% of the deposit.

Now if the loan checks are deposited into some other bank, the bank receiving them can keep the 200% cash equivalent as reserve and lend out another 400% in the form of checks. The money supply multiplies quickly in time of prosperity, but disappears even more quickly during recession. Someone withdraws the deposit that is held as reserve, causing the bank to borrow reserves, Then the bank capital takes the loss of failed loans.

Cycles of boom and bust are built into the economy as a tradition hundreds of years old. Easy credit is offered for some years then shut off suddenly in a month or two. Everyone knows this or should know it, but each time the advice is this time is different.

People as borrowers who use a bit of moderation usually come out OK, but those who borrow in excess will probably be caught in the next cycle, unable to pay and with devalued collateral and deficiency judgements.

Some people have become wealthy by excess borrowing followed by bankruptcy in which some types of assets are sheltered, but rules are becoming more strict, and sometimes criminal charges are made.

Bank loan officers tend to make risky loans when the commissions are high. Then the loan officers may leave for a job elsewhere before the crisis occurs. In this case the bank capital is closely related to the loans and likely to be lost within a few years.

Check this link maybe useful

https://www.investopedia.com/terms/b/bank-capital.asp

Capital is how banks absorb losses on loans, and the riskier a bank's loan portfolio, the more capital it will require.

Dear Madam,

According to the Basel Norms the BIS has classified (in fact systems classified see Mallick (2012, 2014)) Banking Capital into Tier I, Tier II and Tier III by which banks are reporting their Financial Statements. We have shown that there is a common String which exists in all of this Financial Information System defined Capital even in non banking companies which is due to Syatems Integration they follow an ARIMA specification which integrates the spacextime of the Finance Field into the computation of Banking performance, a tremendous symmetry result in the space of banking companies as also the entire electronic stock exchange space as experimentally tested with the Bombay Stock Exchange space. You can check this new Financial Management and Markets Electronic Stock and Flow paradigm of Econophysics in the Banking Sector in Mallick, Sarkar, Ray, Duttachaudhuri, Chakraborty (2001) and Mallick (2010) on www.researchgate.net/profiles/Soumitra_Mallick. This is in line with what our previous discussants have commented like Dr. Ternyik, Allban, Decker, Tripe. This infact proves once again that the definition of capital in banks is both historically backward inductive as well as rational expectationally forward inductive and the integration depends on our Systems Classification and Systems Integration Quantum Mechanical Econophysics Theorem (Mallick et. al. (2012, 2014)). I didn't mean to be complex but thought one can introduce this what may be called new paradigm.

Soumitra Kumar Mallick

Sorry Mustafa, but this is wrong! Bank capital has nothing to do with money in vaults (which would be on the asset side of the balance sheet, whereas capital is on the liability side of he balance sheet). Liquid assets are liquid assets, but they are not capital.

It's rather contrary to the spirit of ResearchGate to be as definitive as that in commenting on a post, but your post displays a serious misunderstanding of banking.

Can I suggest that you have a look at a bank balance sheet? This should help you to understand what I am talking about.

Dear Dr. Ali Khan Sir,

Capital is a measure of ownership of the company (owner's equity) and is measured in numerical terms by what you have correctly stated. ut it certainly enters the Balance Sheet by the liabilities side. The Tier I etc. capital for Banks are again the way of calculating the value of capital, otherwise everyone will rationally like to own more so to say.

Soumitra K. Mallick

In the situation of classic deposit and loan banking, the bank's equity translates into the bank's ability to engage in active operations, which include, above all, loans, paracrine instruments and investments in securities. In classical banking, deposit and credit, the funds deposited in deposits determine the opportunities for the development of lending. If a commercial bank operating in the classical deposit and credit banking model also develops investment banking activities, then the risk management process should include quantification of risks related to the bank's involvement in investment activities for particular types of assets, including investments in securities, derivatives and other assets that generate high credit risk. Investment banking should have appropriately higher specific provisions to cover high levels of estimated risk in order to reduce the likelihood of loss of liquidity and announcements bankrupt in a situation of a downturn in the domestic economy and markets where the bank's contractors and clients operate.

I invite you to the discussion

The issues of risk management in the context of determinants of the global financial crisis are described in the publications:

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I invite you to discussion and cooperation. Greetings

Please specify your query. In my research and scientific publications, I used to deal with such issues and their relationship with credit risk management and the security of the banking system.

Best wishes