Financial fragility under implicit insurance scheme: Evidence from the collapse of Thai financial institutions
AbstractUsing the Thai experience as a clinical study of a financial crisis, we investigate financial failures of Thai financial institutions. This study augments the CAMEL perspective by considering corporate governance and the moral hazard problems under the state of implicit government guarantee. The overall results suggest that high-replicated CAMEL ratings and downgrades of the ratings based on accounting-based information are likely to be important indicators of bank fragility. The ownership-based incentives of the largest shareholders and the level of risk associated with moral hazard problems are also factors that help discriminate sound and unsound financial institutions.
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Bibliographic InfoPaper provided by Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University in its series CEI Working Paper Series with number 2004-16.
Length:  p.
Date of creation: Sep 2004
Date of revision:
CAMEL rating; incentives; deposit insurance; financial failure; Thai financial institutions;
Find related papers by JEL classification:
- G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
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