An Analysis of the South Dakota Retail Sales Tax

The overall objective of the study was to analyze the structure and adequacy of the South Dakota retail sales tax. The following specific objectives guided the research. 1. To analyze the tax structure of the State of South Dakota and the revenue and expenditure patterns of the state over the past 10 years as an indication of the overall adequacy of the tax structure. 2. To examine the characteristics of the South Dakota sales and use tax with emphasis on the tax base. 3. To examine the sales tax in relation to principles of tax equity. 4. To estimate the income elasticity of the sales and use tax to serve as an indication of sales and use tax adequacy. 5. To analyze structural changes in the base of the tax as to their effect on adequacy and equity. 6. To project sales and use tax revenue on the basis of the method used to estimate income elasticity

The effect of the common bond and membership expansion on credit union risk

This paper examines differences in institutional risk profiles based on credit union membership type and membership expansion via “select employee groups,” or SEGs, which are now expressly allowed by the Credit Union Membership Access Act of 1998. A cross-sectional statistical model is specified that examines risk variation relative to the type of common bond and the breadth of the credit union’s membership. In findings that are consistent with earlier research, the authors document that occupationally based credit unions have a unique risk profile relative to other common bonds. This profile includes a greater exposure to concentration risk, which is hedged by holding greater proportions of capital. ; The authors also examine the subsample of Single-Bond occupational credit unions and those Multi-Bond credit unions with primarily occupational group members. They find that the presence of SEGs is negatively related to capital ratios and positively related to loan-to-share ratios relative to the Single-Bond occupational credit unions. The use of survey data documenting the number of SEGs confirms that, as more SEGs are added, credit unions tend to increase their loan-to-share ratios and decrease their capital ratios. However, the number of SEGs and the proportion of loan delinquencies are found to be positively related, suggesting that the informational advantages associated with the common bond become diluted as new groups are added. Overall, the authors conclude that there are material benefits of credit union membership diversification and that these benefits derive from expanded investment opportunities and reduced concentration risk.Credit unions ; Risk

The effect of the common bond and membership expansion on credit union risk

This paper examines differences in institutional risk profiles based on credit union membership type and membership expansion via "select employee groups," or SEGs, which are now expressly allowed by the Credit Union Membership Access Act of 1998. A cross-sectional statistical model is specified that examines risk variation relative to the type of common bond and the breadth of the credit union’s membership. In findings that are consistent with earlier research, the authors document that occupationally based credit unions have a unique risk profile relative to other common bonds. This profile includes a greater exposure to concentration risk, which is hedged by holding greater proportions of capital. ; The authors also examine the subsample of Single-Bond occupational credit unions and those Multi-Bond credit unions with primarily occupational group members. They find that the presence of SEGs is negatively related to capital ratios and positively related to loan-to-share ratios relative to the Single-Bond occupational credit unions. The use of survey data documenting the number of SEGs confirms that, as more SEGs are added, credit unions tend to increase their loan-to-share ratios and decrease their capital ratios. However, the number of SEGs and the proportion of loan delinquencies are found to be positively related, suggesting that the informational advantages associated with the common bond become diluted as new groups are added. Overall, the authors conclude that there are material benefits of credit union membership diversification and that these benefits derive from expanded investment opportunities and reduced concentration risk

Deposit insurance, market discipline and off-balance sheet banking risk of large U.S. commercial banks

The market discipline of off-balance sheet banking activities (OBSA) has been reexamined by employing contingent claims valuation techniques to derive implied asset variances from bank equity and deposit insurance, and from risk-premia for bank subordinated debt. Specifically implied asset variances have been calculated from contingent valuation models and have been regressed over on-balance accounting risk variables and off-balance sheet activities. These implied asset variances are better than equity variance or risk-premia in proxying total risk because they consider both the non-linear nature of contingent claims model and the impact of closure rules. Empirical results document the existence of market discipline of some OBSA. Market participants price these OBSA as risk-reducing. Therefore, regulatory additional capital requirements of such OBS may be inappropriate

The market\u27s evaluation of off-balance sheet banking risk: a methodological reexamination

The empirical literature, to date, has ignored the impact of Off-balance sheet (OBS) banking activities on the default-risk premia borne by bank subordinated debtholders. This paper examines the market discipline of OBS activities by employing a contingent claims pricing model to the default-risk premia on subordinated debt. The standard approach to determine if market prices of subordinated debt reflect the risk of default is to regress the yield spread against accounting measures of bank risk. This approach is inadequate because yield spreads are neither linear nor monotonic functions of bank risk. Moreover, this approach fails to account for the fact that banks are regulated. Observed yields on subordinated bank debt over equivalent maturity treasuries are used to compute implied asset variances. OBS banking activities appear to reduce both linear risk-premia and implied asset variances. These results suggest that bank regulators are overly concerned with the risk exposure of OBS activities. The risk-based capital requirement of OBS banking activities may be inappropriate

The market\u27s evaluation of off-balance sheet banking risk: a methodological reexamination

The empirical literature, to date, has ignored the impact of Off-balance sheet (OBS) banking activities on the default-risk premia borne by bank subordinated debtholders. This paper examines the market discipline of OBS activities by employing a contingent claims pricing model to the default-risk premia on subordinated debt. The standard approach to determine if market prices of subordinated debt reflect the risk of default is to regress the yield spread against accounting measures of bank risk. This approach is inadequate because yield spreads are neither linear nor monotonic functions of bank risk. Moreover, this approach fails to account for the fact that banks are regulated. Observed yields on subordinated bank debt over equivalent maturity treasuries are used to compute implied asset variances. OBS banking activities appear to reduce both linear risk-premia and implied asset variances. These results suggest that bank regulators are overly concerned with the risk exposure of OBS activities. The risk-based capital requirement of OBS banking activities may be inappropriate

FIRM BEHAVIOR UNDER UNCERTAINTY: THE CASE OF OCS PETROLEUM LEASE SALES

Abstract not availabl