The Impact Of Fdicia On Bank Returns And Risk: Evidence From The Capital Markets
Bank regulation; Bank risk; G21; G28; Wealth effects
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. © 2001 Elsevier Science B.V.
Journal of Banking and Finance
Number of Pages
Source API URL
Akhigbe, Aigbe and Whyte, Ann Marie, "The Impact Of Fdicia On Bank Returns And Risk: Evidence From The Capital Markets" (2001). Scopus Export 2000s. 310.