Conventional wisdom in banking suggests a higher capital-asset ratio (CAR) is associated with a lower after-tax return on equity (ROE). Despite the arguments in favor of this hypothesis, data on U.S. banks in the mid- to late-1980s tell a very different story. Bank values of CAR and ROE are...

Traditionally, concerns about market concentration have focused on mispricing and the restriction of output relative to competitive markets. This type of loss is typically measured by the standard welfare triangle. The associated welfare losses usually motivate antitrust policy.<p> <p> This paper...</p></p>

Most of the early studies of bank efficiency focused on scale and product mix efficiency, or how close banks are to producing at the scale or product mix that minimizes costs per unit of output. Despite these past efforts, something rather important is missing from most of the analysis according...

The role of information acquisition for bank regulators is important for the recognition and possible control of bank risk. This role is also consistent with the modern theory of banking under which banks hold a substantial amount of private information about their loan customers, and by...