Changes in market assessments of bank risk following the Riegle-Neal Act of 1994

    Authors

    A. Akhigbe;A. M. Whyte

    Comments

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    Abbreviated Journal Title

    J. Bank Financ.

    Keywords

    bank risk; risk shift; regulation; Riegle-Neal; interstate banking; INTERSTATE BANKING; FINANCIAL INSTITUTIONS; WEALTH; RETURNS; DIDMCA; Business, Finance; Economics

    Abstract

    We examine changes in bank risk following the passage of the Riegle-Neal Act of 1994 and find a significant decline in bank risk. The extent of interstate banking activity and the status of state-level interstate banking laws are important in explaining the risk reduction. Banks with assets in multiple states experience a significant reduction in risk whereas banks with assets in one state experience no significant change in risk. Banks in states with the most restrictive interstate banking provisions experience a significant decrease in risk whereas banks in states with more liberal interstate banking provisions experience a significant increase in risk. (C) 2002 Elsevier Science B.V. All rights reserved.

    Journal Title

    Journal of Banking & Finance

    Volume

    27

    Issue/Number

    1

    Publication Date

    1-1-2003

    Document Type

    Article

    Language

    English

    First Page

    87

    Last Page

    102

    WOS Identifier

    WOS:000180076200005

    ISSN

    0378-4266

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