IDEAS home Printed from https://ideas.repec.org/a/mcb/jmoncb/v31y1999i1p14-34.html
   My bibliography  Save this article

The Value of a Government Monitor for U.S. Banking Firms

Author

Listed:
  • Flannery, Mark J
  • Houston, Joel F

Abstract

Do federal bank examinations add value to the market's supervisory process? To address this question, the author investigates whether Federal Reserve inspections of bank holding companies affect the association between banks' reported book values and the market value of their equity. Using data from the fourth quarters of 1988 and 1990, he finds that the market is aware of bank examinations and takes them into account when valuing bank stocks. Apart from the obvious value they provide to regulators, examinations affect market values in several ways. In some instances, they provide useful certifying information which reduces risk and increases market value. In other instances, examinations induce additional regulatory risk which may reduce market value. The net effect of these results appears to vary over time, and across different types of banks.

Suggested Citation

  • Flannery, Mark J & Houston, Joel F, 1999. "The Value of a Government Monitor for U.S. Banking Firms," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 31(1), pages 14-34, February.
    • Handle: RePEc:mcb:jmoncb:v:31:y:1999:i:1:p:14-34
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mcb:jmoncb:v:31:y:1999:i:1:p:14-34. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley-Blackwell Digital Licensing or Christopher F. Baum (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.