Journal Article
Deposit insurance reform
Wheelock, David C.; Vaughan, Mark D. (2002-10)
In the cover story, find out why some bankers are encouraging Congress to raise the ceiling for insurance on deposits to $130,000 from $100,000 per account. Opponents point out that in the wake of the last increase, the S&L crisis occurred.
The Regional Economist , Issue Oct. , Pages 4-9

Journal Article
Could a CAMELS downgrade model improve off-site surveillance?
Meyer, Andrew P.; Vaughan, Mark D.; Gilbert, R. Alton (2002-01)
The Federal Reserve?s off-site surveillance system includes two econometric models that are collectively known as the System for Estimating Examination Ratings (SEER). One model, the SEER risk rank model, uses the latest financial statements to estimate the probability that each Fed-supervised bank will fail in the next two years. The other component, the SEER rating model, uses the latest financial statements to produce a ?shadow? CAMELS rating for each supervised bank. Banks identified as risky by either model receive closer supervisory scrutiny than other state-member banks.> Because many ...
Review , Volume 84 , Issue Jan. , Pages 47-63

Working Paper
Did FDICIA enhance market discipline on community banks? a look at evidence from the jumbo-CD market
King, Thomas B.; Vaughan, Mark D.; Meyer, Andrew P.; Hall, John R. (2002)
The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) directed the FDIC to resolve bank failures in the least costly manner, shifting more of the failure-resolution burden to jumbo-CD holders. We examine the sensitivity of jumbo-CD yields and runoffs to failure risk before and after FDICIA. We also examine the economic significance of estimated risk sensitivities before and after the Act, looking at the implied impact of risk on bank funding costs and profits. The evidence indicates that yields and runoff were sensitive to risk before and after FDICIA, but that this ...
Supervisory Policy Analysis Working Papers , Paper 2002-04

Journal Article
The commercial paper market: who's minding the shop?
Stojanovic, Dusan; Vaughan, Mark D. (1998-04)
Commercial paper has become a force to be reckoned with in the U.S. money market. It comes with risks, though, that shouldn't be papered over.
The Regional Economist , Issue Apr , Pages 5-9

Journal Article
Rules vs. discretion: the wrong choice could open the floodgates
Buol, Jason J.; Vaughan, Mark D. (2003-01)
Anyone who sets any kind of policy can appreciate the dilemma that faces those trying to prevent construction in floodplains: Is it better to stick to the rules-no matter how harsh-or to exercise discretion under certain circumstances?
The Regional Economist , Issue Jan , Pages 10-11

Working Paper
Can feedback from the jumbo-CD market improve bank surveillance?
Meyer, Andrew P.; Vaughan, Mark D.; Gilbert, R. Alton (2003)
We examine the value of jumbo certificate-of-deposit (CD) signals in bank surveillance. To do so, we first construct proxies for default premiums and deposit runoffs and then rank banks based on these risk proxies. Next, we rank banks based on the output of a logit model typical of the econometric models used in off-site surveillance. Finally, we compare jumbo-CD rankings and surveillance-model rankings as tools for predicting financial distress. Our comparisons include eight out-of-sample test windows during the 1990s. We find that rankings obtained from jumbo-CD data would not have improved ...
Working Papers , Paper 2003-041

Working Paper
Dividends, stock repurchases and signaling: evidence from U.S. panel data
Vaughan, Mark D.; Williams, Michael G. (1998)
This paper exploits yearly accounting data from 1977 to 1994 to test the relative signaling power of dividends and net stock repurchases. The specification controls for potential agency cost and asset dissipation effects. Specifically, we regress changes in future income before extraordinary items on changes in dividends, changes in net stock repurchases, and a host of control variables. We also split the sample at 1981 to measure the impact of changes in the relative taxation of distribution methods. For the full twenty-year sample, only dividend changes are correlated with changes in future ...
Supervisory Policy Analysis Working Papers , Paper 1998-01

Journal Article
Is federal home loan bank funding a risky business for the FDIC?
Stojanovic, Dusan; Yeager, Timothy J.; Vaughan, Mark D. (2000-10)
Easy access to FHLB funds has helped community banks stay afloat in today's competitive markets, but could pose a risk to the FDIC's insurance fund.
The Regional Economist , Issue Oct , Pages 4-9

Working Paper
Can feedback from the jumbo-CD market improve off-site surveillance of community banks?
Meyer, Andrew P.; Vaughan, Mark D.; Gilbert, R. Alton (2002)
We examine the value of feedback from the jumbo-certificate-of-deposit (CD) market in the off-site surveillance of community banks. Using accounting data, we construct proxies for default premiums on jumbo CDs. Then, we produce rank orderings of community banks -- defined as institutions holding less than $500 million in assets (constant 1999 dollars) -- based on these proxies. Next, we use an econometric surveillance model to generate rank orderings based on the probability of encountering financial distress. Finally, we compare these rank orderings as tools for flagging emerging problems. ...
Supervisory Policy Analysis Working Papers , Paper 2002-08

Journal Article
Are district banks losing their profit edge?
Meyer, Andrew P.; Vaughan, Mark D. (1997-04)
After decades of beating out their peers in the return on average assets race, Eighth District banks now trail the pack.
The Regional Economist , Issue Apr , Pages 12-13