IDEAS home Printed from https://ideas.repec.org/a/fip/fedreb/00029.html
   My bibliography  Save this article

Did Banking Reforms of the Early 1990s Fail? Lessons from Comparing Two Banking Crises

Author

Listed:
  • Eliana Balla
  • Helen Fessenden
  • Edward Simpson Prescott
  • John R. Walter

Abstract

New Richmond Fed research on community and midsize banks evaluates the Federal Deposit Insurance Corporation Improvement Act (FDICIA) and Basel I by comparing failures in the 1986-92 period to those in 2007-13. Banks greatly increased commercial real estate lending between the two banking crises, but higher capital mitigated this risk. Failure rates in the recent crisis were mainly driven by the severity of the economic shocks. However, higher capital did not help contain FDIC losses, which were much larger in the recent crisis. One possible explanation is limitations in the accounting triggers used by FDICIA's prompt corrective action requirement.

Suggested Citation

  • Eliana Balla & Helen Fessenden & Edward Simpson Prescott & John R. Walter, 2015. "Did Banking Reforms of the Early 1990s Fail? Lessons from Comparing Two Banking Crises," Richmond Fed Economic Brief, Federal Reserve Bank of Richmond, issue June.
    • Handle: RePEc:fip:fedreb:00029
    as

    Download full text from publisher

    File URL: https://www.richmondfed.org/-/media/richmondfedorg/publications/research/economic_brief/2015/pdf/eb_15-06.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedreb:00029. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christian Pascasio (email available below). General contact details of provider: https://edirc.repec.org/data/frbrius.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.