Risk and return of publicly held versus privately owned banks

The author divides bank holding companies (BHCs) into four size classes, then categorizes each class according to public or private ownership. He compares the performance and risk across bank size classes between 1986 and 2000 and in five-year windows therein. For the largest BHCs, returns on assets and operating costs do not depend on ownership, but for the smaller BHCs, returns on assets are lower and operating costs are higher for those that are publicly owned. Small public BHCs also hold more capital than do small private ones.Corporate governance ; Bank holding companies ; Bank stocks ; Bank management

The 2007-09 financial crisis and bank opaqueness

Doubts about the accuracy with which outside investors can assess a banking firm’s value motivate many government interventions in the banking market. The recent financial crisis has reinforced concerns about the possibility that banks are unusually opaque. Yet the empirical evidence, thus far, is mixed. This paper examines the trading characteristics of bank shares over the period from January 1990 through September 2009. We find that bank share trading exhibits sharply different features before vs. during the crisis. Until mid-2007, large (NYSE-traded) banking firms appear to be no more opaque than a set of control firms, and smaller (NASD-traded) banks are, at most, slightly more opaque. During the crisis, however, both large and small banking firms exhibit a sharp increase in opacity, consistent with the policy interventions implemented at the time. Although portfolio composition is significantly related to market microstructure variables, no specific asset category(s) stand out as particularly important in determining bank opacity.Banks and banking ; Stock market ; Financial crises

Market evidence on the opaqueness of banking firms' assets.

We assess the market microstructure properties of U.S. banking firms' equity, to determine whether they exhibit more or less evidence of asset opaqueness than similar-sized nonbanking firms. The evidence strongly indicates that large banks (traded on NASDAQ) trade much less frequently despite microstructure characteristics. Problem (noncurrent) loans tend to raise the frequency with which the bank's equity trades, as well as the equity's return volatility. The implications for regulatory policy and future market microstructure research are discussed.Bank stocks ; Bank assets

The informativeness of stochastic frontier and programming frontier efficiency scores: Cost efficiency and other measures of bank holding company performance

This paper examines the properties of the X-inefficiencies in U.S. bank holding companies derived from both stochastic and linear programming frontiers. This examination allows the robustness of results across methods to be compared. While we find that calculated programming inefficiency scores are two to three times larger than those estimated using a stochastic frontier, the patterns of the scores across banks and time are similar, and there is a relatively high correlation of the rankings of banks' efficiencies under the two methods. However, when we examine the "informativeness" of the efficiency measured by the two different techniques, we find some large differences. We find evidence that the stochastic frontier scores are more closely related to risk-taking behavior, managerial competence, and bank stock returns. Based on these findings, we conclude that while both methods produce informative efficiency scores, for this data set decision makers should put more weight on the stochastic frontier efficiency estimates.Bank holding companies ; Banks and banking - Costs

The informativeness of stochastic frontier and programming frontier efficiency scores: Cost efficiency and other measures of bank holding company performance

This paper examines the properties of the X-inefficiencies in U.S. bank holding companies derived from both stochastic and linear programming frontiers. This examination allows the robustness of results across methods to be compared. While we find that calculated programming inefficiency scores are two to three times larger than those estimated using a stochastic frontier, the patterns of the scores across banks and time are similar, and there is a relatively high correlation of the rankings of banks' efficiencies under the two methods. However, when we examine the "informativeness" of the efficiency measured by the two different techniques, we find some large differences. We find evidence that the stochastic frontier scores are more closely related to risk-taking behavior, managerial competence, and bank stock returns. Based on these findings, we conclude that while both methods produce informative efficiency scores, for this data set decision makers should put more weight on the stochastic frontier efficiency estimates

Exciton band topology in spontaneous quantum anomalous Hall insulators: applications to twisted bilayer graphene

We uncover topological features of neutral particle-hole pair excitations of correlated quantum anomalous Hall (QAH) insulators whose approximately flat conduction and valence bands have equal and opposite non-zero Chern number. Using an exactly solvable model we show that the underlying band topology affects both the center-of-mass and relative motion of particle-hole bound states. This leads to the formation of topological exciton bands whose features are robust to nonuniformity of both the dispersion and the Berry curvature. We apply these ideas to recently-reported broken-symmetry spontaneous QAH insulators in substrate aligned magic-angle twisted bilayer graphene.Comment: 5+10 pages, 2+2 figures; improved treatment of interaction effects, leading to |C|=1 exciton

Skyrmions in Twisted Bilayer Graphene: Stability, Pairing, and Crystallization

We study the excitations that emerge upon doping the translationally invariant correlated insulating states in magic-angle twisted bilayer graphene at various integer filling factors ν. We identify parameter regimes where these are excitations associated with skyrmion textures in the spin or pseudospin degrees of freedom, and explore both short-distance pairing effects and the formation of long-range ordered skyrmion crystals. We perform a comprehensive analysis of the pseudospin skyrmions that emerge upon doping insulators at even ν, delineating the regime in parameter space where these are the lowest-energy charged excitations by means of self-consistent Hartree-Fock calculations on the interacting Bistritzer-MacDonald model. We explicitly demonstrate the purely electron-mediated pairing of skyrmions, a key ingredient behind a recent proposal of skyrmion superconductivity. Building upon this, we construct hopping models to extract the effective masses of paired skyrmions, and discuss our findings and their implications for skyrmion superconductivity in relation to experiments, focusing on the dome-shaped dependence of the transition temperature on the twist angle. We also investigate the properties of spin skyrmions about the quantized anomalous Hall insulator at ν=+3. In both cases, we demonstrate the formation of robust spin or pseudospin skyrmion crystals upon doping to a finite density away from integer filling

Coulomb-driven band unflattening suppresses KK-phonon pairing in moir\'e graphene

It is a matter of current debate whether the gate-tunable superconductivity in twisted bilayer graphene is phonon-mediated or arises from electron-electron interactions. The recent observation of the strong coupling of electrons to so-called $K$-phonon modes in angle-resolved photoemission spectroscopy experiments has resuscitated early proposals that $K$-phonons drive superconductivity. We show that the bandwidth-enhancing effect of interactions drastically weakens both the intrinsic susceptibility towards pairing as well as the screening of Coulomb repulsion that is essential for the phonon attraction to dominate at low temperature. This rules out purely $K$-phonon-mediated superconductivity with the observed transition temperature of $\sim 1$ K. We conclude that the unflattening of bands by Coulomb interactions challenges any purely phonon-driven pairing mechanism, and must be addressed by a successful theory of superconductivity in moir\'e graphene.Comment: 8 pages, 2 figures (+16 pages, 8 figures supplement

Coulomb-driven band unflattening suppresses K-phonon pairing in moire graphene

It is a matter of current debate whether the gate-tunable superconductivity in twisted bilayer graphene is phonon-mediated or arises from electron-electron interactions. The recent observation of the strong coupling of electrons to so-called K-phonon modes in angle-resolved photoemission spectroscopy experiments has resuscitated early proposals that K-phonons drive superconductivity. We show that the bandwidth-enhancing effect of interactions drastically weakens both the intrinsic susceptibility towards pairing as well as the screening of Coulomb repulsion that is essential for the phonon attraction to dominate at low temperature. This rules out purely K-phonon-mediated superconductivity with the observed transition temperature of ∼1 K. We conclude that the unflattening of bands by Coulomb interactions challenges any purely phonon-driven pairing mechanism, and must be addressed by a successful theory of superconductivity in moiré graphen