337
Views
3
CrossRef citations to date
0
Altmetric
Research Article

Can strong capital regulation prevent risk-taking from deposit insurance?

ORCID Icon &
Pages 1164-1185 | Received 03 Mar 2020, Accepted 23 Nov 2020, Published online: 22 Dec 2020

References

  • Allen, F., E. Carletti, and R. Marquez. 2011. “Credit Market Competition and Capital Regulation.” The Review of Financial Studies 24: 983–1018.
  • Allen, F., E. Carletti, and R. Marquez. 2015. “Deposits and Bank Capital Structure.” Journal of Financial Economics 118: 19.
  • Alston, L. J., W. A. Grove, and D. C. Wheelock. 1994. “ Why Do Banks Fail? Evidence from the 1920s.” Explorations in Economic History 31: 409–431.
  • Anginer, D., A. Demirguc-Kunt, and M. Zhu. 2014. “How Does Deposit Insurance Affect Bank Risk? Evidence from the Recent Crisis.” Journal of Banking & Finance 48: 312–321.
  • Ashraf, B. N., C. Zheng, C. Jiang, and N. Qian. 2020. “Capital Regulation, Deposit Insurance and Bank Risk: International Evidence from Normal and Crisis Periods.” Research in International Business and Finance 52: 101188.
  • Bajgrowicz, P., and O. Scaillet. 2012. “Technical Trading Revisited: False Discoveries, Persistence Tests, and Transaction Costs.” Journal of Financial Economics 106: 473–491.
  • Barras, L., O. Scaillet, and R. Wermers. 2010. “False Discoveries in Mutual Fund Performance: Measuring Luck in Estimated Alphas.” The Journal of Finance 65: 179–216.
  • Bartholdy, J., G. W. Boyle, and R. D. Stover. 2003. “Deposit Insurance and the Risk Premium in Bank Deposit Rates.” Journal of Banking & Finance 27: 699–717.
  • Bartholdy, J., G. W. Boyle, and R. D. Stover. 2004. “Deposit Insurance and the Stock Market: Evidence from Denmark.” European Journal of Finance, 10 (6): 567–578. Routledge.
  • Beck, T., O. De Jonghe, and G. Schepens. 2013. “Bank Competition and Stability: Cross-Country Heterogeneity.” Journal of Financial Intermediation 22: 218–244.
  • Benjamini, Y., and Y. Hochberg. 1995. “Controlling the False Discovery Rate: A Practical and Powerful Approach to Multiple Testing.” Journal of the Royal Statistical Society. Series B (Methodological) 57: 289–300.
  • Benjamini, Y., and W. Liu. 1999. “A Step-Down Multiple Hypotheses Testing Procedure That Controls the False Discovery Rate Under Independence.” Journal of Statistical Planning and Inference 82: 163–170.
  • Benjamini, Y., and D. Yekutieli. 2001. “The Control of the False Discovery Rate in Multiple Testing Under Dependency.” The Annals of Statistics 29: 1165–1188.
  • Berger, A. N., W. Goulding, and T. Rice. 2014. “Do Small Businesses Still Prefer Community Banks?” Journal of Banking & Finance 44: 264–278.
  • Bernard, V. L., R. C. Merton, and K. G. Palepu. 1995. “Mark-to-Market Accounting for Banks and Thrifts: Lessons from the Danish Experience.” Journal of Accounting Research 33: 1–32.
  • Calomiris, C. W., and M. S. Jaremski. 2016. “Stealing Deposits: Deposit Insurance, Risk-Taking and the Removal of Market Discipline in Early 20th Century Banks.” National Bureau of Economic Research Working Paper Series No. 22692.
  • Carapella, F., and G. D. Giorgio. 2004. “Deposit Insurance, Institutions, and Bank Interest Rates.” Transition Studies Review 11: 77–92.
  • Carr, J., F. Mathewson, and N. Quigley. 1994. Ensuring Failure: Financial System Stability and Deposit Insurance in Canada. Toronto: C.D. Howe Institute.
  • Carr, J., F. Mathewson, and N. Quigley. 1995. “The Economics of Canadian Deposit Insurance.” In Department of Economics Research Reports, 9502. University of Western Ontatioy, Department of Economics, University of Western Ontario.
  • Cebenoyan, A. Sinan, and Philip E. Strahan, 2004, Risk management, capital structure and lending at banks, Journal of Banking & Finance 28: 19–43
  • Chernykh, L., and R. A. Cole. 2011. “Does Deposit Insurance Improve Financial Intermediation? Evidence from the Russian Experiment.” Journal of Banking & Finance 35: 388–402.
  • Cole, R. A. 1993. “When Are Thrift Institutions Closed? An Agency-Theoretic Model.” Journal of Financial Services Research 7: 283–307.
  • Cordell, L. R., G. D. M. Donald, and M. E. Wohar. 1993. “Corporate Ownership and the Thrift Crisis.” Journal of Law and Economics 36: 719–756.
  • Coval, J. D., and A. V. Thakor. 2005. “Financial Intermediation as a Beliefs-Bridge Between Optimists and Pessimists.” Journal of Financial Economics 75: 535–569.
  • Cull, R., L. W. Senbet, and M. Sorge. 2005. “Deposit Insurance and Financial Development.” Journal of Money Credit & Banking (Ohio State University Press) 37: 43–82.
  • Delis, M. D., I. Hasan, and E. G. Tsionas. 2014. “The Risk of Financial Intermediaries.” Journal of Banking & Finance 44: 1–12.
  • DeLong, G., and A. Saunders. 2011. “Did the Introduction of Fixed-Rate Federal Deposit Insurance Increase Long-Term Bank Risk-Taking?” Journal of Financial Stability 7: 19–25.
  • Demirgüç-Kunt, A., and E. Detragiache. 2002. “Does Deposit Insurance Increase Banking System Stability? An Empirical Investigation.” Journal of Monetary Economics 49: 1373–1406.
  • Demirgüç-Kunt, A., and E. J. Kane. 2002. “Deposit Insurance Around the Globe: Where Does It Work?” The Journal of Economic Perspectives 16: 175–195.
  • Demsetz, R. S., and P. E. Strahan. 1997. “Diversification, Size and Risk at Bank Holding Companies.” Journal of Money, Credit and Banking 29 (3): 300–313.
  • Dewenter, K. L., A. C. Hess, and J. Brogaard. 2017. “Institutions and Deposit Insurance: Empirical Evidence.” Journal of Financial Services Research 54: 269–292.
  • Diamond, D. W., and P. H. Dybvig. 1983. “Bank Runs, Deposit Insurance, and Liquidity.” The Journal of Political Economy 91: 401–419.
  • Esty, B. C. 1997. “Organizational Form and Risk Taking in the Savings and Loan Industry.” Journal of Financial Economics 44: 25–55.
  • Fraser, D. R., and A. Zardkoohi. 1996. “Ownership Structure, Deregulation, and Risk in the Savings and Loan Industry.” Journal of Business Research 37: 63–69.
  • Furlong, F. T., and M. C. Keeley. 1989. “Capital Regulation and Bank Risk-Taking: A Note.” Journal of Banking & Finance 13: 883–891.
  • García-Marco, T., and M. D. Robles-Fernández. 2008. “Risk-taking Behaviour and Ownership in the Banking Industry: The Spanish Evidence.” Journal of Economics and Business 60: 332–354.
  • Gropp, R., C. Gruendl, and A. Guettler. 2014. “The Impact of Public Guarantees on Bank Risk-Taking: Evidence from a Natural Experiment.” Review of Finance 18: 457–488.
  • Gropp, R., and J. Vesala. 2004. “Deposit Insurance, Moral Hazard and Market Monitoring.” Review of Finance 8: 571–602.
  • Grossman, R. S. 1992. “Deposit Insurance, Regulation, and Moral Hazard in the Thrift Industry: Evidence from the 1930s.” The American Economic Review 82: 800–821.
  • Harvey, C. R. 2017. “Presidential Address: The Scientific Outlook in Financial Economics.” The Journal of Finance 72: 1399–1440.
  • Harvey, C. R., Y. Liu, and H. Zhu. 2016. “ … and the Cross-Section of Expected Returns.” The Review of Financial Studies 29: 5–68.
  • Holm, S. 1979. “A Simple Sequentially Rejective Multiple Test Procedure.” Scandinavian Journal of Statistics 6: 65–70.
  • Holmstrom, B., and J. Tirole. 1997. “Financial Intermediation, Loanable Funds, and the Real Sector.” The Quarterly Journal of Economics 112: 663–691.
  • Hovakimian, A., and E. J. Kane. 2000. “Effectiveness of Capital Regulation at U.S. Commercial Banks, 1985 to 1994.” The Journal of Finance 55: 451–468.
  • Hovakimian, A., E. J. Kane, and L. Laeven. 2003. “How Country and Safety-Net Characteristics Affect Bank Risk-Shifting.” Journal of Financial Services Research 23: 177–204.
  • Iannotta, G., G. Nocera, and A. Sironi. 2007. “Ownership Structure, Risk and Performance in the European Banking Industry.” Journal of Banking & Finance 31: 2127–2149.
  • Ioannidou, V. P., and M. F. Penas. 2010. “Deposit Insurance and Bank Risk-Taking: Evidence from Internal Loan Ratings.” Journal of Financial Intermediation 19: 95–115.
  • Jensen, K. B., and J. Noergaard. 1976. Bank- og Sparekasseloven: Med Kommentarer. København: Juristforbundet, Kbh. Juristforbundet.
  • Justesen, L. G. 2015. Empirical Banking. Aarhus: Aarhus University.
  • Kam Hon, C. 2011. “Deposit Insurance and Banking Stability.” CATO Journal 31: 99–117.
  • Kane, E. J. 1989. “The Unending Deposit Insurance Mess.” Science 246: 451–456.
  • Karels, G. V., and C. A. McClatchey. 1999. “Deposit Insurance and Risk-Taking Behavior in the Credit Union Industry.” Journal of Banking & Finance 23: 105–134.
  • Keeley, M. C. 1990. “Deposit Insurance, Risk, and Market Power in Banking.” The American Economic Review 80: 1183–1200.
  • Keeley, M. C., and F. T. Furlong. 1990. “A Reexamination of Mean-Variance Analysis of Bank Capital Regulation.” Journal of Banking & Finance 14: 69–84.
  • Kim, D., and A. M. Santomero. 1988. “Risk in Banking and Capital Regulation.” The Journal of Finance 43: 1219–1233.
  • Koehn, M., and A. M. Santomero. 1980. “Regulation of Bank Capital and Portfolio Risk.” The Journal of Finance 35: 1235–1244.
  • Laeven, L. 2002. “International Evidence on the Value of Deposit Insurance.” The Quarterly Review of Economics and Finance 42: 721–732.
  • Laeven, L., and F. Valencia. 2013. “Systemic Banking Crises Database.” IMF Economic Review 61: 225–270.
  • Lepetit, L. 2008. “Bank Income Structure and Risk. An Empirical Analysis of European Banks.” Journal of Banking and Finance 32 (8): 1452–1467.
  • Lepetit, L., and F. Strobel. 2013. “Bank Insolvency Risk and Time-Varying Z-Score Measures.” Journal of International Financial Markets, Institutions and Money 25: 73–87.
  • Lepetit, L., and F. Strobel. 2015. “Bank Insolvency Risk and Z-Score Measures: A Refinement.” Finance Research Letters 13: 214–224.
  • Lundtofte, F., and C. Y. Nielsen. 2019. “The Effect of Stricter Capital Regulation on Banks’ Risk-Taking: Theory and Evidence.” European Financial Management 25: 1229–1248.
  • McKenzie, J. A., R. A. Cole, and R. A. Brown. 1992. “Moral Hazard, Portfolio Allocation, and Asset Returns for Thrift Institutions.” Journal of Financial Services Research 5: 315–339.
  • Mehran, H., and A. Thakor. 2011. “Bank Capital and Value in the Cross-Section.” The Review of Financial Studies 24: 1019–1067.
  • Mølgaard, E. 2003. “Vagthund og Syndebuk.” In Personlig Beretning om Finanskrisen i Danmark 1987-1995. Copenhagen: Børsens Forlag A/S.
  • Nier, E., and U. Baumann. 2006. “Market Discipline, Disclosure and Moral Hazard in Banking.” Journal of Financial Intermediation 15: 332–361.
  • Pozdena, R. J. 1992. “Danish Banking: Lessons for Deposit Insurance Reform.” Journal of Financial Services Research 5: 289–298.
  • Rajan, R. G., and L. Zingales. 1995. “What Do We Know About Capital Structure? Some Evidence from International Data.” The Journal of Finance 50: 1421–1460.
  • Roberts, M. R., and T. M. Whited. 2011. Endogeneity in Empirical Corporate Finance. SSRN eLibrary.
  • Thakor, A. V., and W. A. Amoud. 2008. Handbook of financial intermediation and banking. Amsterdam.
  • Tilsynet med banker og sparekasser. 1984. “Banker og Sparekasser 1984.” Beretning om bankers og sparekassers virksomhed.
  • Wheelock, D. C. 1992. “Deposit Insurance and Bank Failures: New Evidence from the 1920s.” Economic Inquiry 30: 530.
  • Wheelock, D. C., Wilson, P. W., 1995. “Explaining Bank Failures: Deposit Insurance, Regulation, and Efficiency.” The Review of Economics and Statistics 77: 689–700.

Reprints and Corporate Permissions

Please note: Selecting permissions does not provide access to the full text of the article, please see our help page How do I view content?

To request a reprint or corporate permissions for this article, please click on the relevant link below:

Academic Permissions

Please note: Selecting permissions does not provide access to the full text of the article, please see our help page How do I view content?

Obtain permissions instantly via Rightslink by clicking on the button below:

If you are unable to obtain permissions via Rightslink, please complete and submit this Permissions form. For more information, please visit our Permissions help page.