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Journal Article
The regulation of bank entry
Journal Article
Bank charters vs thrift charters
Working Paper
Deposit insurance, risk, and market power in banking
A fixed-rate deposit insurance system provides a moral hazard for excessive risk taking and is not viable absent regulation. Although the deposit insurance system appears to have worked remarkably well over most of its 50-year history, major problems began to appear in the early 1980s. This paper addresses the puzzle of why major problems began to arise in the early 1980s and not sooner. ; The hypothesis is that increases in competition caused bank charter values to decline, which, in turn, caused banks to- increase default risk through increases. in asset risk and reductions in capital. This ...
Conference Paper
Prudential supervision to manage systemic vulnerability
Conference Paper
Moral hazard and franchise value: theory and evidence
Journal Article
Are mergers responsible for the surge in new bank charters?
After stagnating for many years, the rate of new bank formation increased sharply in the second half of the 1990s. The financial press attributes this development to the high volume of bank mergers, which are said to have encouraged new entry by reducing service to some bank customers. It is commonly asserted, for example, that many new banks serve small businesses whose banks were taken over by larger banks uninterested in making small business loans. Most banking experts agree that such an increase in new banks in response to mergers would be healthy, helping maintain competition in local ...
Working Paper
The Effects of Bank Charter Switching on Supervisory Ratings
I study whether commercial banks can improve their supervisory ratings by switching charters. I use the fees charged by chartering authorities to establish a causal effect from switching on ratings. Banks receive more favorable ratings after they change charters, an effect that is large for both national and state charters. In addition, controlling for bank ratings, banks that switch charters fail more often than others. These results suggest that banks can arbitrage ratings by switching charters and are consistent with regulators competing for banks by rating incoming banks better than ...
Conference Paper
What happens if banks are closed \"early\"?
Journal Article
Bank charter values and risk