Dynamic Depositor Discipline in U.S. Banks PDF Download
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Author: Andrea M. Maechler
Publisher: International Monetary Fund
ISBN: 1451875401
Category : Business & Economics
Languages : en
Pages : 35
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Book Description
This paper investigates the presence of depositor discipline in the U.S. banking sector. We test whether depositors penalize (discipline) banks for poor performance by withdrawing their uninsured deposits. While focusing on the movements in uninsured deposits, we also account for the possibility that banks may be forced to pay a risk premium in the form of higher interest rates to induce depositors not to withdraw their uninsured deposits. Our results support the existence of depositor discipline: a weak bank may not necessarily be able to stop a deposit drain by raising its uninsured deposit interest rates.
Author: Andrea M. Maechler
Publisher: International Monetary Fund
ISBN: 1451875401
Category : Business & Economics
Languages : en
Pages : 35
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Book Description
This paper investigates the presence of depositor discipline in the U.S. banking sector. We test whether depositors penalize (discipline) banks for poor performance by withdrawing their uninsured deposits. While focusing on the movements in uninsured deposits, we also account for the possibility that banks may be forced to pay a risk premium in the form of higher interest rates to induce depositors not to withdraw their uninsured deposits. Our results support the existence of depositor discipline: a weak bank may not necessarily be able to stop a deposit drain by raising its uninsured deposit interest rates.
Author: Kathleen McDill
Publisher:
ISBN:
Category :
Languages : en
Pages : 33
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Book Description
This paper investigates the presence of depositor discipline in the U.S. banking sector. We test whether depositors penalize (discipline) banks for poor performance by withdrawing their uninsured deposits. While focusing on the movements in uninsured deposits, we also account for the possibility that banks may be forced to pay a risk premium in the form of higher interest rates to induce depositors not to withdraw their uninsured deposits. Our results support the existence of depositor discipline: a weak bank may not necessarily be able to stop a deposit drain by raising its uninsured deposit interest rates.
Author: Andrea Maechler
Publisher:
ISBN:
Category :
Languages : en
Pages : 34
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Book Description
This paper investigates the presence of depositor discipline in the U.S. banking sector. We test whether depositors penalize (discipline) banks for poor performance by withdrawing their uninsured deposits. While focusing on the movements in uninsured deposits, we also account for the possibility that banks may be forced to pay a risk premium in the form of higher interest rates to induce depositors not to withdraw their uninsured deposits. Our results support the existence of depositor discipline: a weak bank may not necessarily be able to stop a deposit drain by raising its uninsured deposit interest rates.
Author: Andréa M. Maechler
Publisher:
ISBN:
Category :
Languages : en
Pages : 33
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Book Description
Author: Fazelina Sahul Hamid
Publisher: LAP Lambert Academic Publishing
ISBN: 9783659227646
Category :
Languages : en
Pages : 156
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Book Description
This book aims to answer a few key questions that are relevant in banking. Firstly, it aims to find if CAMEL-type indicators are able to predict subsequent decisions by regulators to fail banks. Secondly, it aims to find if depositors discipline banks by focusing on depositors' reaction to the price signal and the amount of risk-related information that banks disclose. The findings show that banks' probability of failure increases as a result of high reliance on external funding and depositors in East Asia are not sensitive to price signal but they are sensitive to the amount of information disclosure. This study also finds that depositors in East Asia reward good banks for disclosing more information but they do not discipline weak banks by demanding greater disclosure. This implies that disclosure is a more effective signal for healthy banks than for weak ones. These analyses provide support to the proposition of the third pillar of the Basel II which aims to encourage market discipline by requiring banks to disclose more risk-related information. This book should be especially useful to banks and banking regulators.
Author: Fazelina Sahul Hamid
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Author:
Publisher: Lulu.com
ISBN: 9291316695
Category : Bank capital
Languages : en
Pages : 294
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Book Description
Author: C. E. V. Borio
Publisher: MIT Press
ISBN: 9780262025751
Category : Business & Economics
Languages : en
Pages : 472
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Book Description
Leading academics and policymakers address the theory of market discipline and consider evidence across different industries and countries. The effectiveness of market discipline -- the strong built-in incentives that encourage banks and financial systems to operate soundly and efficiently -- commands much attention today, particularly in light of recent accounting scandals. As government discipline, in the form of regulation, seems to grows less effective as the banking industry and financial markets grow more complex, the role of market discipline becomes increasingly important. In this collection, which grew out of a conference cosponsored by the Federal Reserve Bank of Chicago and the Bank for International Settlements in Basel, Switzerland, a diverse group of academics and policymakers address different aspects of the ability of market discipline to affect corporate behavior and performance. A major purpose of the book is to develop evidence on how market discipline operates across non-government regulated industries and in different countries, how successful it has been, and how it may transfer to a regulated industry. The chapters examine such topics as the theory of market discipline, evidence of market discipline in banking and other industries, evidence of market discipline for countries, the current state of corporate governance, and the interaction of market discipline and public policy.
Author: Asl? Demirgüç-Kunt
Publisher: World Bank Publications
ISBN:
Category : Asset Portfolio
Languages : en
Pages : 42
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Book Description
"Explicit deposit insurance tends to be detrimental to bank stability-- the more so where bank interest rates are deregulated and the institutional environment is weak"--Cover.
Author: Andrea M. Maechler
Publisher: International Monetary Fund
ISBN: 1451874170
Category : Business & Economics
Languages : en
Pages : 47
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Book Description
We bring to bear a hand-collected dataset of executive turnovers in U.S. banks to test the efficacy of market discipline in a 'laboratory setting' by analyzing banks that are less likely to be subject to government support. Specifically, we focus on a new face of market discipline: stakeholders' ability to fire an executive. Using conditional logit regressions to examine the roles of debtholders, shareholders, and regulators in removing executives, we present novel evidence that executives are more likely to be dismissed if their bank is risky, incurs losses, cuts dividends, has a high charter value, and holds high levels of subordinated debt. We only find limited evidence that forced turnovers improve bank performance.
