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Risk and return of publicly held versus privately owned banks

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  • Simon H. Kwan

Abstract

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.

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Bibliographic Info

Article provided by Federal Reserve Bank of New York in its journal Economic Policy Review.

Volume (Year): (2004)
Issue (Month): Sep ()
Pages: 97-107

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Handle: RePEc:fip:fednep:y:2004:i:sep:p:97-107:n:v.10no.2

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Keywords: Corporate governance ; Bank holding companies ; Bank stocks ; Bank management;

References

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Citations

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Cited by:
  1. Thierno Amadou Barry & Laetitia Lepetit & Amine Tarazi, 2011. "Ownership structure and risk in publicly held and privately owned Banks," Post-Print hal-00785225, HAL.
  2. Webb Cooper, Elizabeth, 2009. "Monitoring and governance of private banks," The Quarterly Review of Economics and Finance, Elsevier, vol. 49(2), pages 253-264, May.
  3. Athanasoglou, Panayiotis & Ioannis, Daniilidis & Manthos, Delis, 2013. "Bank procyclicality and output: Issues and policies," MPRA Paper 50830, University Library of Munich, Germany.
  4. Elizabeth W. Cooper, 2011. "Determinants of off-balance sheet usage in private banks," Studies in Economics and Finance, Emerald Group Publishing, vol. 28(4), pages 248-259, October.
  5. Eliana Balla & Morgan J. Rose, 2011. "Loan loss reserves, accounting constraints, and bank ownership structure," Working Paper 11-09, Federal Reserve Bank of Richmond.
  6. Yu, Peiyi & Neus, Werner, 2005. "Market Structure, Scale Efficiency, and Risk as Determinants of German Banking Profitability," Tübinger Diskussionsbeiträge 294, University of Tübingen, School of Business and Economics.
  7. Frank Schmielewski & Thomas Wein, 2012. "Are private banks the better banks? An insight into the principal-agent structure and risk-taking behavior of German banks," Working Paper Series in Economics 236, University of Lüneburg, Institute of Economics.
  8. Iannotta, Giuliano & Nocera, Giacomo & Sironi, Andrea, 2007. "Ownership structure, risk and performance in the European banking industry," Journal of Banking & Finance, Elsevier, vol. 31(7), pages 2127-2149, July.

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