Deposit Insurance, Regulation, and Moral Hazard in the Thrift Industry: Evidence from the 1930's
AbstractThis paper compares risk-taking of insured.and uninsured thrifts operating under strict and less-strict regulatory regimes during the 1930's. Analysis of balance-sheet data indicates that while newly insured thrifts undertook less risk than their uninsured counterparts, possibly because of screening by deposit-insurance authorities, moral hazard emerged gradually. Insured institutions operating under relatively permissive regulatory regimes were more prone to undertake risky lending activities than their more tightly regulated counterparts, possibly because of screening by deposit-insurance authorities, moral hazard emerged gradually. Insured institutions operating under relatively premissive regulatory regimes were more prone to undertake risky lending activities than their more tightly regulated counterparts. Given the current system of deposit insurance, the results suggest that effective regulation and supervision will play a key role in maintaining thrift stability in the 1990s. Copyright 1992 by American Economic Association.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by American Economic Association in its journal American Economic Review.
Volume (Year): 82 (1992)
Issue (Month): 4 (September)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Starbird, S. Andrew & Amanor-Boadu, Vincent & Roberts, Tanya, 2008. "Traceability, Moral Hazard, and Food Safety," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43840, European Association of Agricultural Economists.
- Kariastanto, Bayu, 2011. "Blanket guarantee, deposit insurance, and risk-shifting incentive: evidence from Indonesia," MPRA Paper 35557, University Library of Munich, Germany.
- M. Shahid Ebrahim, 2008.
"Can an Islamic Model of Housing Finance Cooperative Elevate the Economic Status of the Underprivileged?,"
Papers on Economics of Religion
08/04, Department of Economic Theory and Economic History of the University of Granada..
- Ebrahim, M. Shahid, 2009. "Can an Islamic model of housing finance cooperative elevate the economic status of the underprivileged?," Journal of Economic Behavior & Organization, Elsevier, vol. 72(3), pages 864-883, December.
- Brahim Guizani & Wako Watanabe, 2010. "The Deposit Insurance and the Risk-Shifting Incentive Evidence from the Blanket Deposit Insurance in Japan," Keio/Kyoto Joint Global COE Discussion Paper Series 2010-004, Keio/Kyoto Joint Global COE Program.
- Gruben, William C. & McComb, Robert P., 2003. "Privatization, competition, and supercompetition in the Mexican commercial banking system," Journal of Banking & Finance, Elsevier, vol. 27(2), pages 229-249, February.
- Jones, Jeffrey S. & Miller, Scott A. & Yeager, Timothy J., 2011. "Charter value, Tobin's Q and bank risk during the subprime financial crisis," Journal of Economics and Business, Elsevier, vol. 63(5), pages 372-391, September.
- Fernandez, Ana I. & Gonzalez, Francisco, 2005. "How accounting and auditing systems can counteract risk-shifting of safety-nets in banking: Some international evidence," Journal of Financial Stability, Elsevier, vol. 1(4), pages 466-500, October.
- Ioannidou, Vasso P. & Penas, María Fabiana, 2010.
"Deposit insurance and bank risk-taking: Evidence from internal loan ratings,"
Journal of Financial Intermediation,
Elsevier, vol. 19(1), pages 95-115, January.
- Ioannidou, V. & Penas, M.F., 2008. "Deposit Insurance and Bank Risk-Taking: Evidence from Internal Loan Ratings," Discussion Paper 2008-022, Tilburg University, Tilburg Law and Economic Center.
- Gonzalez, Francisco, 2005. "Bank regulation and risk-taking incentives: An international comparison of bank risk," Journal of Banking & Finance, Elsevier, vol. 29(5), pages 1153-1184, May.
- Karels, Gordon V. & McClatchey, Christine A., 1999. "Deposit insurance and risk-taking behavior in the credit union industry," Journal of Banking & Finance, Elsevier, vol. 23(1), pages 105-134, January.
- Bartholdy, Jan & Boyle, Glenn W. & Stover, Roger D., 2003.
"Deposit insurance and the risk premium in bank deposit rates,"
Journal of Banking & Finance,
Elsevier, vol. 27(4), pages 699-717, April.
- Bartholdy, Jan & Boyle, G. W. & Stover, R. D., 2003. "Deposit Insurance and the Risk Premium in Bank Deposit Rates," Finance Working Papers 02-10, University of Aarhus, Aarhus School of Business, Department of Business Studies.
- Jones, Jeffrey S. & Lee, Wayne Y. & Yeager, Timothy J., 2013. "Valuation and systemic risk consequences of bank opacity," Journal of Banking & Finance, Elsevier, vol. 37(3), pages 693-706.
- Joseph P. Hughes & Loretta J. Mester, 2012.
"A Primer on Market Discipline and Governance of Financial Institutions for Those in a State of Shocked Disbelief,"
Departmental Working Papers
201204, Rutgers University, Department of Economics.
- Joseph P. Hughes & Loretta J. Mester, 2012. "A primer on market discipline and governance of financial institutions for those in a state of shocked disbelief," Working Papers 12-13, Federal Reserve Bank of Philadelphia.
- Hughes, Joseph P. & Mester, Loretta J. & Moon, Choon-Geol, 2001.
"Are scale economies in banking elusive or illusive?: Evidence obtained by incorporating capital structure and risk-taking into models of bank production,"
Journal of Banking & Finance,
Elsevier, vol. 25(12), pages 2169-2208, December.
- Joseph P. Hughes & Loretta J. Mester & Choon-Geol Moon, 2000. "Are scale economies in banking elusive or illusive? Evidence obtained by incorporating capital structure and risk-taking into models of bank production," Working Papers 00-4, Federal Reserve Bank of Philadelphia.
- Stojanovic, Dusan & Vaughan, Mark D. & Yeager, Timothy J., 2008. "Do Federal Home Loan Bank membership and advances increase bank risk-taking?," Journal of Banking & Finance, Elsevier, vol. 32(5), pages 680-698, May.
- Christopher, Gandrud, 2011. "Competing risks analysis and deposit insurance governance convergence," MPRA Paper 36087, University Library of Munich, Germany.
- Joseph P. Hughes, 2011. "The Elusive Scale Economies of the Largest Banks and their Implications for Global Competitiveness," Departmental Working Papers 201134, Rutgers University, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros) or (Michael P. Albert).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.