TY  - BOOK
AU  - Hovakimian,Armen
AU  - Kane,Edward J.
ED  - National Bureau of Economic Research.
TI  - Risk-Shifting by Federally Insured Commercial Banks
T2  - NBER working paper series
PY  - 1996///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - August 1996; Hardcopy version available to institutional subscribers
N2  - Mispriced and misadministered deposit insurance imparts risk-shifting incentives to U.S. banks.  Regulators are expected to monitor and discipline increases in bank risk exposure that would transfer wealth from the FDIC to bank stockholders.  This paper assesses the success regulators had in controlling risk-shifting by U.S. banks during 1985-1994.  In contrast to single-equation estimates developed from the option model by others, our simultaneous-equation evidence indicates that regulators failed to prevent large U.S. banks from shifting risk to the FDIC. Moreover, at the margin, banks that are undercapitalized shifted risk more effectively than other sample banks
UR  - https://www.nber.org/papers/w5711
UR  - http://dx.doi.org/10.3386/w5711
ER  -