Impact of Ownership Structure and Regulation on the Risk-Taking Behavior of Depository Institutions

This paper presents an analysis of the impact of ownership structure and regulation on the risk-taking behavior of commercial banks and savings and loans. Our work differs from previous efforts in that we measure risk in terms of an institution's asset or business risk, using the Ronn-Verma option-pricing methodology, as well as its equity risk. Our work is also unique in that we have incorporated dummy variables into our empirical model which enables us to test risk-taking differentials between commercial banks and savings and loans, as well as risk-taking differentials between federally and state chartered institutions