Regulatory taxes, investment and financing decisions for insured banks
An investigation of the effects of interest rate and credit risk on optimal capital structure and investment decisions. The authors show that with no uncertainty in interest rates, capital regulation will reduce the risk of the bank's assets, but that under interest rate uncertainty, the impact of regulation may be detrimental and raise the risk of the deposits as well as government subsidies to the bank's shareholders.
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|Date of creation:||1995|
|Date of revision:|
|Publication status:||Published in Conference on Bank Structure and Competition (1995 : 31st)|
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Ritchken, Peter & Thomson, James B. & DeGennaro, Ramon P. & Li, Anlong, 1993.
"On flexibility, capital structure and investment decisions for the insured bank,"
Journal of Banking & Finance,
Elsevier, vol. 17(6), pages 1133-1146, December.
- Peter Ritchken & James Thomson & Ray DeGennaro & Anlong Li, 1991. "On flexibility, capital structure, and investment decisions for the insured bank," Working Paper 9110, Federal Reserve Bank of Cleveland.
- Kane, Edward J & Unal, Haluk, 1990.
" Modeling Structural and Temporal Variation in the Market's Valuation of Banking Firms,"
Journal of Finance,
American Finance Association, vol. 45(1), pages 113-36, March.
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- Mark D. Flood, 1990. "On the use of option pricing models to analyze deposit insurance," Review, Federal Reserve Bank of St. Louis, issue Jan, pages 19-35.
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"Reputation Acquisition in Debt Markets,"
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- Crouhy, Michel & Galai, Dan, 1991. "A contingent claim analysis of a regulated depository institution," Journal of Banking & Finance, Elsevier, vol. 15(1), pages 73-90, February.
- J. Huston McCulloch, 1978. "Interest Rate Risk and Capital Adequacy For Traditional Banks and Financial Intermediaries," NBER Working Papers 0237, National Bureau of Economic Research, Inc.
- Heath, David & Jarrow, Robert & Morton, Andrew, 1992. "Bond Pricing and the Term Structure of Interest Rates: A New Methodology for Contingent Claims Valuation," Econometrica, Econometric Society, vol. 60(1), pages 77-105, January.
- Herring, Richard J & Vankudre, Prashant, 1987. " Growth Opportunities and Risk-Taking by Financial Intermediaries," Journal of Finance, American Finance Association, vol. 42(3), pages 583-99, July.
- Edward J. Kane, 1985. "The Gathering Crisis in Federal Deposit Insurance," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262611856, June.
- Merton, Robert C., 1977. "An analytic derivation of the cost of deposit insurance and loan guarantees An application of modern option pricing theory," Journal of Banking & Finance, Elsevier, vol. 1(1), pages 3-11, June.
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