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Some Evidence on 'Herding' Behavior of U.S. Banks

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  • Jain, Arvind K
  • Gupta, Satyadev

Abstract

The authors examine the international lending decisions of U.S. commercial banks of different sizes from 1977 to 1982 for evidence ofthe ex istence of "herding" behavior. Granger-Sims causality tests for the loans gran ted by the top nine, the next fifteen, and the remaining U.S. banks provide no c lear evidence of herding between the top nine and the next fifteen banks. There is, however, evidence that the remaining banks (mostly small ones) herded behind the top twenty-four banks. Overall, the analysis presented here points to a very weak herding behavior. Copyright 1987 by Ohio State University Press.

Suggested Citation

  • Jain, Arvind K & Gupta, Satyadev, 1987. "Some Evidence on 'Herding' Behavior of U.S. Banks," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 19(1), pages 78-89, February.
  • Handle: RePEc:mcb:jmoncb:v:19:y:1987:i:1:p:78-89
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    References listed on IDEAS

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    1. V. Vance Roley & Carl E. Walsh, 1985. "Monetary Policy Regimes, Expected Inflation, and the Response of Interest Rates to Money Announcements," The Quarterly Journal of Economics, Oxford University Press, vol. 100(Supplemen), pages 1011-1039.
    2. Robert J. Shiller & John Y. Campbell & Kermit L. Schoenholtz, 1983. "Forward Rates and Future Policy: Interpreting the Term Structure of Interest Rates," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 14(1), pages 173-224.
    3. Cornell, Bradford, 1983. "Monetary policy and the daily behavior of interest rates," Journal of Economics and Business, Elsevier, vol. 35(2), pages 189-203, June.
    4. MacKinnon, James G. & White, Halbert, 1985. "Some heteroskedasticity-consistent covariance matrix estimators with improved finite sample properties," Journal of Econometrics, Elsevier, vol. 29(3), pages 305-325, September.
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    Cited by:

    1. Dragan Miljkovic & Daniel Mostad, 2007. "Obesity and low-carb diets in the united states: A herd behavior model," Agribusiness, John Wiley & Sons, Ltd., vol. 23(3), pages 421-434.
    2. repec:eee:jfinin:v:30:y:2017:i:c:p:61-70 is not listed on IDEAS
    3. Diana Bonfim & Moshe Kim, 2012. "Liquidity risk in banking: is there herding?," Working Papers w201218, Banco de Portugal, Economics and Research Department.
    4. Calmès, Christian & Théoret, Raymond, 2014. "Bank systemic risk and macroeconomic shocks: Canadian and U.S. evidence," Journal of Banking & Finance, Elsevier, vol. 40(C), pages 388-402.
    5. Amandha Ganegoda & John Evans, 2014. "A framework to manage the measurable, immeasurable and the unidentifiable financial risk," Australian Journal of Management, Australian School of Business, vol. 39(1), pages 5-34, February.
    6. M. Fern'andez-Mart'inez & M. A S'anchez-Granero & Mar'ia Jos'e Mu~noz Torrecillas & Bill McKelvey, 2016. "A comparison among some Hurst exponent approaches to predict nascent bubbles in $500$ company stocks," Papers 1601.04188, arXiv.org.
    7. van den End, Jan Willem & Tabbae, Mostafa, 2012. "When liquidity risk becomes a systemic issue: Empirical evidence of bank behaviour," Journal of Financial Stability, Elsevier, vol. 8(2), pages 107-120.
    8. Acharya, Viral V. & Yorulmazer, Tanju, 2007. "Too many to fail--An analysis of time-inconsistency in bank closure policies," Journal of Financial Intermediation, Elsevier, vol. 16(1), pages 1-31, January.
    9. Ugo Albertazzi & Margherita Bottero & Gabriele Sene, 2014. "Sharing information on lending decisions: an empirical assessment," Temi di discussione (Economic working papers) 980, Bank of Italy, Economic Research and International Relations Area.

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