Charter Value and Risk-taking: Evidence from Indian Banks
AbstractThe article examines the determinants of banks’ charter value and its disciplining effect on bank risk-taking since the mid-1990s. The analysis indicates that deposit and loan market concentration exert a significant effect on charter value, suggestive of a strong link between competition and charter value. Among the traditional banking activities, bank size and efficiency are found to be important determinants of charter value. The disciplining effect of charter value is robust across several measures on bank risk.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 19543.
Date of creation: 01 Aug 2009
Date of revision:
Publication status: Published in Journal of the Asia Pacific Economy 3.14(2009): pp. 270-286
banking; charter value; risk-taking; capital buffer; prudential regulation; India;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-16 (All new papers)
- NEP-CWA-2010-01-16 (Central & Western Asia)
- NEP-RMG-2010-01-16 (Risk Management)
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