3,270 research outputs found

    Using market incentives to reform bank regulation and federal deposit insurance

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    A presentation of the case for adopting market-oriented reforms to our bank regulatory and federal deposit insurance systems.Deposit insurance ; Bank supervision

    The cost of buying time: lessons from the thrift debacle

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    An argument that capital forbearance for thrifts in the 1980s was at best a misguided policy whose costs will have long-term consequences for the health of both the nation's depositories and the overall economy.Savings and loan associations

    Errors in recorded security prices and the turn-of-the year effect

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    A study that concludes recorded security price errors are potential sources of misspecification in joint tests of the capital asset pricing model and market efficiency.Stock - Prices

    FSLIC forbearances to stockholders and the value of savings and loan shares

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    An investigation of the value of FSLIC forbearances to the stockholders of insolvent stock-chartered thrift institutions, concluding that these forbearances increase the stock-market value of thrift institutions.Stocks ; Savings and loan associations ; Federal Savings and Loan Insurance Corporation

    PSAF, economic capital, and the new Basel Accord

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    The 1980 Monetary Control Act requires Reserve Banks to recover their costs of providing payments services over time, including a normal return on capital-that is, the same after-tax return on equity that a private firm would require. To date, this private-sector adjustment factor has been estimated and applied as a single hurdle rate for all Reserve Bank payments services. Capital budgeting theory suggests that firms should use a different hurdle rate for each distinct type of activity according to its risks. For Reserve Bank payments services, this might entail estimating separate private-sector adjustment factors for paper-based services and for electronic services. Alternatively, a single hurdle rate of capital could be used for all services if capital were allocated to each service according to its risk.Bank capital ; Banks and banking - Accounting

    The use of market information in pricing deposit insurance

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    An argument that information about the value of the deposit-insurance guarantee is available from market-generated data.Deposit insurance

    On systemically important financial institutions and progressive systemic mitigation

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    One of the most important issues in the regulatory reform debate is that of systemically important financial institutions. This paper proposes a framework for identifying and supervising such institutions; the framework is designed to remove the advantages they derive from becoming systemically important and to give them more time-consistent incentives. It defines criteria for classifying firms as systemically important: size (the classic doctrine of too big to let fail) and the four C’s of systemic importance (contagion, concentration, correlation, and conditions); it also discusses the concept of progressive systemic mitigation.Systemic risk ; Financial stability ; Financial institutions

    The national depositor preference law

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    A critical analysis of the probable effects of national depositor preference--a provision of the Omnibus Budget Reconciliation Act of 1993--showing that although the FDIC may experience some cost savings in the short term, the long-term benefits are likely to be greatly diminished.Bank failures ; Federal Deposit Insurance Corporation

    Unitary thrifts: a performance analysis

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    Title IV of the Gramm-Leach-Bliley Act of 1999 closed the unitary thrift holding company loophole, which allowed a limited commingling of banking and commerce. This article examines whether eliminating this loophole was beneficial by empirically comparing the performance of thrifts in holding companies owned by nondepository institutions (UTHC thrifts) with other thrifts. Important differences between these two types of thrifts are found. UTHC thrifts tend to outperform the others during the period studied and appear to be less risky-possibly because UTHC thrifts seem to have more diversified revenue streams, loan and asset portfolios, and funding sources than do other thrifts. No evidence is found to suggest that limited commingling of banking and commerce, in the form of the UTHC loophole, poses undue risks to the federal financial safety net.Financial institutions ; Banking law

    Using financial data to identify changes in bank condition

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    An empirical study using an early-warning bank failure prediction model and call-report data to predict deterioration in a bank's condition.Bank supervision ; Bank failures
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