The impact of FDICIA on bank returns and risk: Evidence from the capital markets |
| |
| Affiliation: | 1. Florida Atlantic University, Boca Raton FL, USA;2. Department of Finance, College of Business Administration, University of Central Florida, P.O. Box 161400, Orlando, FL 32816-1400, USA;1. Ferdinand-Braun-Institut, Leibniz-Institut für Höchstfrequenztechnik, Berlin, Germany;2. Humboldt Universität zu Berlin, Institut für Physik, Berlin, Germany;3. Institut für Festkörperphysik, Technische Universität Berlin, Berlin, Germany;1. Financial Engineering Research Center, Shanghai Jiaotong University, Shanghai 200052, China;2. School of Management, Zhejiang University, Hangzhou 310058, China;1. Bureau of Economic Geology, Jackson School of Geosciences, The University of Texas at Austin, University Station Box X, Austin, TX 78713-8924, USA;2. YPF S.A., Macacha Güemes 515, C1106BKK Buenos Aires, Argentina;3. YTEC, Av. del Petroleo Argentino 900-1198, Berisso, Buenos Aires, Argentina;1. Department of Economics, University of Piraeus, Greece;2. Professor of Finance, Jubilee Building, School of Business, Management, and Economics, University of Sussex, Brighton BN1 9RH, UK |
| |
| Abstract: | This study examines the impact of the Federal Deposit Insurance Corporation Improvement Act (FDICIA) of 1991 on bank stock returns and risk. We find that FDICIA had a generally positive effect on bank stock returns and resulted in a significant reduction in bank risk. The extent of the risk reduction varies based on the capitalization, size, and credit risk of the institutions with poorly capitalized, large, and high credit risk banks experiencing the greatest risk reduction. The results obtained using two separate control groups also bolster the conclusion that FDICIA’s passage resulted in a significant decline in bank risk. |
| |
| Keywords: | |
| 本文献已被 ScienceDirect 等数据库收录！ |
|
