Title
The impact of FDICIA on bank returns and risk: Evidence from the capital markets
Abbreviated Journal Title
J. Bank Financ.
Keywords
bank risk; wealth effects; bank regulation; FINANCIAL INSTITUTIONS; COMMERCIAL-BANKS; SAVINGS; DIDMCA; ACT; Business, Finance; Economics
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. (C) 2001 Elsevier Science B.V. All rights reserved. JEL classification: G21; G28.
Journal Title
Journal of Banking & Finance
Volume
25
Issue/Number
2
Publication Date
1-1-2001
Document Type
Article
Language
English
First Page
393
Last Page
417
WOS Identifier
ISSN
0378-4266
Recommended Citation
"The impact of FDICIA on bank returns and risk: Evidence from the capital markets" (2001). Faculty Bibliography 2000s. 2902.
https://stars.library.ucf.edu/facultybib2000/2902