Search Results
Working Paper
Adverse selection and competing deposit insurance systems in pre-depression Texas
In 1910, Texas instituted a highly unique deposit insurance program for its state chartered banks consisting of two separate plans: the depositors guaranty fund, similar in operation to the deposit insurance schemes adopted in several other states; and the depositors bond security system, which required the procurement of a privately issued insurance policy. We hypothesize that the provision of a choice in funds led to risk-sorting among the banks, with the relatively conservative institutions opting for the comparatively rigorous bond security system. Employing a probit model with ...
Journal Article
Consolidation, technology, and the changing structure of banks' small business lending
The U.S. banking industry continues to consolidate, with large, complex banking organizations becoming more important. Traditionally, these institutions have not emphasized small business lending. On the other hand, technological advances, particularly credit scoring models, make it easier for banks to extend small business credit. To see what effects these influences might have generated on small business lending, David Ely and Kenneth Robinson explore the small business lending patterns at U.S. banks from 1994 through 1999. They find that larger banks are increasing their market share, ...
Journal Article
Noteworthy: banking: district outperforms U.S. on profits
Banking industry indicators deteriorated in 2008--both in the Dallas Fed's district and nationwide.
Journal Article
Banks venture into new territory
Financial modernization legislation passed in 1999 allows banking organizations to directly invest in any type of company. This merchant banking authority gives banks greater opportunities to provide venture capital to start-up companies and later-stage equity financing to more mature firms. Kenneth Robinson examines how banks have pursued their new merchant banking powers. Robinson finds evidence that organizations that engage in merchant banking tend to be larger than those that do not. His findings are also consistent with the hypothesis that banks may be attempting to lower their average ...
Journal Article
Banking recovery could be vulnerable to interest rate increases
The earnings on assets?generally loans?may not respond as rapidly as the cost of funds?deposits?leading to declining profits.
Working Paper
What was behind the M2 breakdown?
A deterioration in the link between the M2 monetary aggregate and GDP, along with large errors in predicting M2 growth, led the Board of Governors to downgrade the M2 aggregate as a reliable indicator of monetary policy in 1993. In this paper, we argue that the financial condition of depository institutions was a major factor behind the unusual pattern of M2 growth in the early 1990s. By constructing alternative measures of M2 based on banks and thrifts capital positions, we show that the anomalous behavior of M2 in the early 1990s disappears. Specifically, after accounting for the effect of ...
Journal Article
Eleventh District savings and loans outperform industry nationwide
While the larger banking industry grabbed most of the attention, U.S. savings and loans (S&Ls) also felt the strain of the recent financial crisis. Major institutions such as Countrywide Financial and Washington Mutual failed.