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Reciprocal brokered deposits and bank risk

Author

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  • Shaffer, Sherrill

Abstract

Economic theory predicts that reciprocal brokered deposits, by enhancing deposit insurance coverage, may reduce market discipline for banks, permitting them to take more risk in various dimensions. A newly available dataset provides empirical evidence related to that hypothesis.

Suggested Citation

  • Shaffer, Sherrill, 2012. "Reciprocal brokered deposits and bank risk," Economics Letters, Elsevier, vol. 117(2), pages 383-385.
  • Handle: RePEc:eee:ecolet:v:117:y:2012:i:2:p:383-385
    DOI: 10.1016/j.econlet.2012.05.041
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    References listed on IDEAS

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    1. Cole, Rebel A. & Gunther, Jeffery W., 1995. "Separating the likelihood and timing of bank failure," Journal of Banking & Finance, Elsevier, vol. 19(6), pages 1073-1089, September.
    2. Hughes, Joseph P. & Mester, Loretta J. & Moon, Choon-Geol, 2001. "Are scale economies in banking elusive or illusive?: Evidence obtained by incorporating capital structure and risk-taking into models of bank production," Journal of Banking & Finance, Elsevier, vol. 25(12), pages 2169-2208, December.
    3. Shaffer, Sherrill, 1998. "The Winner's Curse in Banking," Journal of Financial Intermediation, Elsevier, vol. 7(4), pages 359-392, October.
    4. Espahbodi, Pouran, 1991. "Identification of problem banks and binary choice models," Journal of Banking & Finance, Elsevier, vol. 15(1), pages 53-71, February.
    5. DeYoung, Robert & Hasan, Iftekhar, 1998. "The performance of de novo commercial banks: A profit efficiency approach," Journal of Banking & Finance, Elsevier, vol. 22(5), pages 565-587, May.
    6. Demirguc-Kunt, Asli & Detragiache, Enrica, 2002. "Does deposit insurance increase banking system stability? An empirical investigation," Journal of Monetary Economics, Elsevier, vol. 49(7), pages 1373-1406, October.
    7. David C. Wheelock & Paul W. Wilson, 2000. "Why do Banks Disappear? The Determinants of U.S. Bank Failures and Acquisitions," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 127-138, February.
    8. DeYoung, Robert, 2003. " De Novo Bank Exit," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 35(5), pages 711-728, October.
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    Citations

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    Cited by:

    1. Doug Dyer & Majdi Quttainah & Pengfei Ye, 2015. "Privatization, intermediation and performance: global evidence," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 5(2), pages 207-229, December.
    2. Li, Guo & Shaffer, Sherrill, 2015. "Reciprocal brokered deposits, bank risk, and recent deposit insurance policy," The North American Journal of Economics and Finance, Elsevier, vol. 33(C), pages 366-384.
    3. Felix Noth & Lena Tonzer, 2017. "Bank risk proxies and the crisis of 2007/09: a comparison," Applied Economics Letters, Taylor & Francis Journals, vol. 24(7), pages 498-501, April.

    More about this item

    Keywords

    Reciprocal brokered deposits; Moral hazard; Bank risk;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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