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Journal Article
One-bank holding company debt: regulatory policy and experience
Working Paper
Who's minding the store? motivating and monitoring hired managers at small, closely held firms: the case of commercial banks
We test whether the gains from hiring an outside manager exceed the principal-agent costs of owner-manager separation at 266 small, closely held U.S. commercial banks. Our results suggest that hiring an outside manager can improve a bank's profit efficiency, but that these gains depend on aligning the hired managers with owners via managerial shareholdings. We find that over-utilizing this control mechanism results in entrenchment, while under-utilization is costly in terms of foregone profits. This study provides a relatively unfettered test of mitigating principal-agent costs, because these ...
Journal Article
Successful strategies in interstate bank acquisitions
Much of the recent consolidation in the banking industry has been across state lines, and this trend will accelerate due to recent federal legislation. As interstate banking expands further, the performance and success of banks that are acquired will be the key factor determining how much consolidation will occur and which organizations will be major participants. This article therefore examines a group of banks that were acquired on an interstate basis in 1986 and 1987, and tracks their performance after acquisition. It identifies strategies and characteristics that distinguish acquisitions ...
Journal Article
Bank examination classifications and loan risk
Journal Article
Bank profits in a changing environment
Journal Article
Small business lending by commercial banks in Colorado : 1994 to 1996
The structure of Colorado's banking industry has recently undergone significant change and, therefore, provides a good case study with which to gauge the impact of consolidation on sources of loans and access to credit for small business. We find that between 1994 and 1996, lending to small businesses in Colorado by small to medium size banking organizations grew much faster than lending by large organizations. This lending pattern was similar across in-state and out-of-state banking organizations. Thus, the difference is largely driven by size rather than by the location of the ...
Journal Article
Interstate banking - what are the competitive effects?
Working Paper
What can financial stability reports tell us about macroprudential supervision?
Many countries have suggested macroprudential supervision as a means for earlier identification and better control of the risks that might lead to a financial crisis. Since macroprudential supervision would focus on the financial system in its entirety and on major risks that could threaten financial stability, it shares many of the same goals as the financial stability reports written by most central banks. This article examines the financial stability reports of five central banks to assess how effective they were in identifying the problems that led to the recent financial crisis and what ...
Journal Article
Financial stability reports: how useful during a financial crisis?
Many of the origins of the recent financial crisis were in the United States, beginning with subprime mortgages and mortgage securities. As the crisis spread globally, few market participants or regulatory authorities saw it coming and all underestimated its severity. ; In the United States, the crisis has sparked many proposals to address its perceived causes and prevent a recurrence. One approach already used in many other countries is publishing financial stability reports. These reports review the condition of the financial system, identify and assess risks to the system, and suggest ...