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Bibframe Work

Title
Are bank shareholders enemies of regulators or a potential source of market discipline? Are bank shareholders enemies of regulators or a potential source of market discipline?
Type
Text
Genre Form
federal or national government publication
electronic resource
Language
English
Classification
LCC: HB1 (Source: dlc)
Identified By
Lccn: 2005617003
Summary
"In moral hazard models, bank shareholders have incentives to transfer wealth from the deposit insurer--that is, maximize put option value--by pursuing riskier strategies. For safe banks with large charter value, however, the risk-taking incentive is outweighed by the possibility of losing charter value. Focusing on the relationship between book value, market value, and a risk measure, this paper develops a semi-parametric model for estimating the critical level of bank risk at which put option value starts to dominate charter value. From these estimates, we infer the extent to which the risk-taking incentive prevailed during 1986-92, a period characterized by serious banking problems and financial turmoil. We find that despite the difficult financial environment, shareholders' risk-taking incentive was confined primarily to a small fraction of highly risky banks"--Federal Reserve Bank of New York web site.
Authorized Access Point
Park, Sangkyun. Are bank shareholders enemies of regulators or a potential source of market discipline?
Authorized Access Point Variant
Peristiani, Stavros. Are bank shareholders enemies of regulators or a potential source of market discipline?
Federal Reserve Bank of New York. Are bank shareholders enemies of regulators or a potential source of market discipline?