Journal Article

Considering Bank Age and Performance for De Novo Status

Abstract: Stephen Jones, Forest Myers, and Jim Wilkinson evaluate the appropriate length of the enhanced supervisory period by analyzing de novo bank financial performance over time. They find that the typical de novo bank’s financial performance differs substantially from that of established banks during their first three years; by the end of three years, the financial performance of de novo banks more closely resembles older and more mature banks. Their results suggest that the three-year enhanced supervisory period is likely appropriate for mitigating risk without excessively burdening new banks.

Keywords: Banks and banking; Bank supervision; De novo banks;

JEL Classification: G21;

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Bibliographic Information

Provider: Federal Reserve Bank of Kansas City

Part of Series: Economic Review

Publication Date: 2022-06-02

Volume: 107

Issue: no.2