An analysis of the impact of depositor preference laws on the cost of debt capital for banks and on the value of FDIC deposit guarantees. The authors find that depositor preference laws increase the value of uninsured deposit claims and reduce the size of the FDIC subsidy, but will not affect...

A model of bank asset sales in which information asymmetries create the incentive for unregulated banks to originate and sell loans to other banks, rather than fund them with deposit liabilities. Private information implies that bankers can fund local loans only to the extent that their capital...

This paper presents an empirical analysis of the determinants of the leverage ratios (the book value of liabilities divided by the total of the book value of liabilities' and the market value of equity) for 232 bank holding companies for December 1986, June 1987, and December 1987. Many...

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...

An intermediation model that examines the efficiency and welfare implications of banks' required capital-asset ratio and of the regulations that limit - and in some countries forbid - banks' investments in equity to a certain proportion of each firm's capital. ; A look at how episodes of...

Most models of deposit insurance assume that the volatility of a bank's assets is exogenously provided. Although this framework allows the impact of volatility on bankruptcy costs and deposit insurance subsidies to be explored, it is static and does not incorporate the fact that equityholders...

The impacts of deposit insurance and forbearance on the costs and value of uninsured deposits and equity capital are shown under three regimes.

An examination of the impact of increased capital requirements on bank portfolio behavior, finding that although the variance of earnings and the incentive to increase leverage are reduced with risk- and leverage-related interest rates, the impact of increased capital requirements on portfolio...

Risk-based capital (RBC) is an important component of deposit insurance reform. This paper provides an empirical analysis of the new 1992 RBC bank standards, applying them to data on virtually all U.S. banks from 1982 to 1989. The data reveal strong associations between several measures of...

A presentation of a theoretical model of regional banking using plausible information asymmetries to explain how local bank capital may affect the funding of regional investments, concluding that regional banking conditions can affect the efficiency of investment and the level of future...