Download or read book Dynamic Depositor Discipline in U S Banks written by Andrea M. Maechler and published by International Monetary Fund. This book was released on 2003-11-01 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Dynamic Depositor Discipline in U S Banks written by Kathleen McDill and published by . This book was released on 2014 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Dynamic Depositor Discipline in U S Banks written by Andrea Maechler and published by . This book was released on 2006 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Dynamic Depositor Discipline in US Banks written by Andréa M. Maechler and published by . This book was released on 2003 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Essays on Bank Fragility Dynamic Depositor Discipline and Disclosure written by Fazelina Sahul Hamid and published by LAP Lambert Academic Publishing. This book was released on 2012 with total page 156 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Dynamic Depositor Discipline written by Fazelina Sahul Hamid and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Depositor Discipline and Bank s Discretionary Behaviors written by Dung Tran and published by . This book was released on 2018 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a large panel of US bank holding companies from 2001 to 2015, this study investigate how depositors respond to the bank's discretionary behaviors. We document evidence of a higher deposit rates for banks that engage more in earnings management, suggesting the evidence of market discipline. Depositors seem to monitor bank's discretionary behaviors at a lesser extent during the crisis time, potentially due to the governement intervention, but they become more severe after the crisis. Interestingly, there is no evidence of depositors monitoring for large banks before and during crisis, suggesting the “too-big-to-fail” perception of depositors. However, this perception is wiped out after the crisis when we observe a stronger market discipline in large banks. The study also documents evidence of monitoring from insured depositors, but not uninsured depositors during the crisis, suggesting that the deposit insurance schemes are not always fully credible. After the crisis, insured depositors seem to increase more their monitoring than uninsured depositors. Our study is of interest to regulators and policymakers who are concerns of strengthening the market discipline.
Download or read book Do Depositors Discipline Banks and Did Government Actions During the Recent Crisis Reduce this Discipline An International Perspective written by Allen N. Berger and published by . This book was released on 2014 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: The recent financial crisis highlights the importance of both regulatory and market discipline. Government reactions to the crisis included expanding deposit insurance coverage and rescuing troubled institutions, including some institutions that might not otherwise be considered too important to fail. These actions may have the unintended consequence of a reduction in market discipline that might otherwise penalize banks for risk-taking behavior. Alternatively, market discipline may have increased during the crisis due to heightened awareness of the risks of bank failures. To address these issues, we first test for the presence of depositor discipline effects in the period leading up to the financial crisis in both the US and the EU. Second, we test whether depositor discipline decreased or increased during the crisis. We find significant depositor discipline prior to the crisis in both the US and EU, but this varies between the US and the EU as well as with banking organization size and with listed versus unlisted status. We also find that depositor discipline mostly decreased during the crisis, except for the case of small US banks.
Download or read book International Convergence of Capital Measurement and Capital Standards written by and published by Lulu.com. This book was released on 2004 with total page 294 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Market Discipline Across Countries and Industries written by C. E. V. Borio and published by MIT Press. This book was released on 2004 with total page 472 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Who Disciplines Bank Managers written by Andrea M. Maechler and published by International Monetary Fund. This book was released on 2009-12-01 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Forecasting Financial Markets in India written by Rudra Prakash Pradhan and published by Allied Publishers. This book was released on 2009 with total page 224 pages. Available in PDF, EPUB and Kindle. Book excerpt: Papers presented at the Forecasting Financial Markets in India, held at Kharagpur during 29-31 December 2008.
Download or read book Banking Crises Liquidity and Credit Lines written by Gurbachan Singh and published by Routledge. This book was released on 2012-06-14 with total page 274 pages. Available in PDF, EPUB and Kindle. Book excerpt: The banking crises in 2007-10 are not exceptional. There have been many such crises in the past in both developed countries and emerging economies. A banking crisis can be related to solvency or liquidity (or both). This book focuses on banking crisis and liquidity. This book starts from basics and gradually builds up with very few technicalities. Though the analysis is primarily theoretical, we provide a historical background, a macroeconomic perspective, and policy implications for both closed and open economies.
Download or read book Bank Solvency and Funding Cost written by Christoph Aymanns and published by International Monetary Fund. This book was released on 2016-03-15 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: Understanding the interaction between bank solvency and funding cost is a crucial pre-requisite for stress-testing. In this paper we study the sensitivity of bank funding cost to solvency measures while controlling for various other measures of bank fundamentals. The analysis includes two measures of bank funding cost: (a) average funding cost and (b) interbank funding cost as a proxy of wholesale funding cost. The main findings are: (1) Solvency is negatively and significantly related to measures of funding cost, but the effect is small in magnitude. (2) On average, the relationship is stronger for interbank funding cost than for average funding cost. (3) During periods of stress interbank funding cost is more sensitive to solvency than in normal times. Finally, (4) the relationship between funding cost and solvency appears to be non-linear, with higher sensitivity of funding cost at lower levels of solvency.
Download or read book Deposit Insurance Around the World written by Aslı Demirgüç-Kunt and published by MIT Press. This book was released on 2008 with total page 415 pages. Available in PDF, EPUB and Kindle. Book excerpt: Explicit deposit insurance (DI) is widely held to be a crucial element of modern financial safety nets. This book draws on an original cross-country dataset on DI systems and design features to examine the impact of DI on banking behavior and assess the policy complications that emerge in developing countries.
Download or read book Potential of market discipline in Pakistan written by Mirza, Nawazish and published by Intl Food Policy Res Inst. This book was released on 2016-04-15 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt: The aim of this research is to ascertain whether Pakistan’s financial system is conducive to market discipline. We measure the potential of depositors to induce market discipline in the commercial banking sector. A comprehensive survey of over six thousand respondents was used to gauge their propensity to discipline bank management in response to deteriorating financial conditions. Our results portray that depositors are likely to withdraw funds in response to a reduction in profitability, an increase in non-performing loans, and a reduction in total assets. We identify that banks with better service quality are less sensitive to deposit withdrawals in the event of a reduction in their financial performance. Among other findings, the presence of contractual guarantees by the government desensitizes depositors to market information, making them less likely to be involved in imposing market discipline.
Download or read book FDIC Banking Review written by and published by . This book was released on 2006 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt:
