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Depositor preference legislation and failed banks' resolution costs

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  • William P. Osterberg
  • James B. Thomson

Abstract

An examination of the empirical impact of depositor preference legislation (DPL) on resolution type and resolution costs for commercial banks. It focuses on the impact of state DPL statutes, using FDIC and call-report data on resolution costs and types for all operating FDIC-BIF insured commercial banks that closed or required FDIC financial assistance from January 1986 through December 1992.
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Suggested Citation

  • William P. Osterberg & James B. Thomson, 1998. "Depositor preference legislation and failed banks' resolution costs," Proceedings 591, Federal Reserve Bank of Chicago.
    • Handle: RePEc:fip:fedhpr:591
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    References listed on IDEAS

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    1. Keeley, Michael C, 1990. "Deposit Insurance, Risk, and Market Power in Banking," American Economic Review, American Economic Association, vol. 80(5), pages 1183-1200, December.
    2. Barth, James R & Bartholomew, Philip F & Bradley, Michael, 1990. "Determinants of Thrift Institution Resolution Costs," Journal of Finance, American Finance Association, vol. 45(3), pages 731-754, July.
    3. Kane, Edward J, 1990. "Principal-Agent Problems in S&L Salvage," Journal of Finance, American Finance Association, vol. 45(3), pages 755-764, July.
    4. James B. Thomson & Walker F. Todd, 1990. "An insider's view of the political economy of the too big to fail doctrine," Working Papers (Old Series) 9017, Federal Reserve Bank of Cleveland.
    5. Boot, Arnoud W. A. & Thakor, Anjan V., 1991. "Off-balance sheet liabilities, deposit insurance and capital regulation," Journal of Banking & Finance, Elsevier, vol. 15(4-5), pages 825-846, September.
    6. Avery, Robert B. & Berger, Allen N., 1991. "Loan commitments and bank risk exposure," Journal of Banking & Finance, Elsevier, vol. 15(1), pages 173-192, February.
    7. William P. Osterberg, 1996. "The impact of depositor preference laws," Economic Review, Federal Reserve Bank of Cleveland, issue Q III, pages 2-11.
    8. William P. Osterberg & James B. Thomson, 1994. "Underlying determinants of closed-bank resolution costs," Working Papers (Old Series) 9403, Federal Reserve Bank of Cleveland.
    9. Murphy, Kevin M & Topel, Robert H, 2002. "Estimation and Inference in Two-Step Econometric Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 88-97, January.
    10. Ramon P. DeGennaro & James B. Thomson, 1992. "Capital forbearance and thrifts: an ex post examination of regulatory gambling," Working Papers (Old Series) 9209, Federal Reserve Bank of Cleveland.
    11. Allen, Linda & Saunders, Anthony, 1993. "Forbearance and valuation of deposit insurance as a callable put," Journal of Banking & Finance, Elsevier, vol. 17(4), pages 629-643, June.
    12. Buser, Stephen A & Chen, Andrew H & Kane, Edward J, 1981. "Federal Deposit Insurance, Regulatory Policy, and Optimal Bank Capital," Journal of Finance, American Finance Association, vol. 36(1), pages 51-60, March.
    13. Gary D. Koppenhaver & Roger D. Stover, 1991. "Standby letters of credit and bank capital: evidence of market disciplines," Proceedings 326, Federal Reserve Bank of Chicago.
    14. Kane, Edward J., 1986. "Appearance and reality in deposit insurance: The case for reform," Journal of Banking & Finance, Elsevier, vol. 10(2), pages 175-188, June.
    15. James B. Thomson, 1994. "The national depositor preference law," Economic Commentary, Federal Reserve Bank of Cleveland, issue Feb.
    16. William P. Osterberg & James B. Thomson, 1994. "Depositor preference and the cost of capital for insured depository institutions," Working Papers (Old Series) 9404, Federal Reserve Bank of Cleveland.
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    Cited by:

    1. Kahn, Charles M. & Roberds, William, 2001. "Real-time gross settlement and the costs of immediacy," Journal of Monetary Economics, Elsevier, vol. 47(2), pages 299-319, April.

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