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An empirical analysis of the relation between bank charter value and risk taking

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  • Niu, Jijun

Abstract

This paper examines the relation between bank charter value and risk taking. Using a sample of U.S. banks over the period 1990–2006, we find that the relation is U-shaped: as charter value increases, risk taking first decreases and then increases. This finding is robust across alternative measures of risk taking and an estimation method that accounts for the joint determination of charter value and risk taking.

Suggested Citation

  • Niu, Jijun, 2012. "An empirical analysis of the relation between bank charter value and risk taking," The Quarterly Review of Economics and Finance, Elsevier, vol. 52(3), pages 298-304.
  • Handle: RePEc:eee:quaeco:v:52:y:2012:i:3:p:298-304
    DOI: 10.1016/j.qref.2012.05.001
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Ion Lapteacru, 2016. "On the consistency of the Z-score to measure the bank risk," Larefi Working Papers 1604, Larefi, Université Bordeaux 4.
    2. Melchisedek Joslem Ngambou Djatche, 2018. "Re-Exploring the Nexus between Monetary Policy and Banks' Risk-Taking," GREDEG Working Papers 2018-12, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
    3. Ion Lapteacru, 2017. "The Z-score is dead, long live the Z-score! A new way to measure bank risk," Working Papers hal-01518652, HAL.
    4. Stefan Arping, 2014. "Does Competition make Banks more Risk-seeking?," Tinbergen Institute Discussion Papers 14-059/IV, Tinbergen Institute.
    5. Yassine Bakkar & Clovis Rugemintwari & Amine Tarazi, 2017. "Charter value and bank stability before and after the global financial crisis of 2007-2008 Charter value and bank stability before and after the global financial crisis of 2007-2008," Working Papers hal-01337601, HAL.

    More about this item

    Keywords

    Bank; Charter value; Risk taking;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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