Bank failure Research Papers - Academia.edu (original) (raw)

Top Papers
Most Cited Papers
Most Downloaded Papers
Newest Papers
People
- by
- •
- Psychology, Natural Hazards, Numerical Analysis, Atmospheric sciences
- by Kate Kearins
- •
- IT Management, Human nature, Legislation, Case Study
- by Alicia Herrero
- •
- Event history analysis, Monetary Policy, Banking Crisis, Profitability
- by João Santos
- •
- Economic policy, Rate of return, Newspaper, Federal Reserve
- by Michael Hopkins
- •
- Real Estate, Real estate market, Lessons Learned, Bank failure

Over the past 35 years, a trend of decreasing water clarity has been documented in Lake Tahoe, attributable in part to the delivery of fine grained sediment emanating from upland and channel erosion. A recent study showed that the Upper Truckee River is the single largest contributor of sediment to Lake Tahoe, with a large proportion of the sediment load emanating from streambanks. This study combines field data with numerical modeling to identify the critical conditions for bank stability along an unstable reach of the Upper Truckee River, California. Bank failures occur during winter and spring months, brought on by repeated basal melting of snow packs and rain-on-snow events. Field studies of young lodgepole pines and Lemmon's willow were used to quantify the mechanical, hydrologic, and net effects of riparian vegetation on streambank stability. Lemmon's willow provided an order of magnitude more root reinforcement (5.5 kPa) than the lodgepole pines (0.5 kPa); the hydrologic effects of the species varied spatially and temporally and generally were of a smaller magnitude than the mechanical effects. Overall, Lemmon's willow provided a significant increase in bank strength, reducing the frequency of bank failures and delivery of fine grained sediment to the study reach of the Upper Truckee River.

- by Eddy Langendoen
- •
- Environmental Engineering, Civil Engineering, Riparian vegetation, Field Study

... to market risk, the introduction of the S component in the revised rating system, CAMELS, is not ... the lag between insolvency and regulatory closure may impart a bias against the accuracy ofCAMEL ratings, if ... Failures occurring... more

- by Rebel Cole
- •
- Financial Services, Information Content, Bank failure, Monitoring System
- by Jenifer Daley and +1
- •
- Applied Economics, Developing Country, Financial, United States of America
- by Andrew Winton
- •
- Corporate Finance, Credit Risk, Financial intermediation, Bank failure

The Centre for Planning and Economic Research (KEPE) was established as a research unit, under the title Centre of Economic Research, in 1959. Its primary aims were the scientific study of the problems of the Greek economy, the... more

- by Prodromos Vlamis
- •
- Real Estate, Financial System, Banking Crisis, BanK Lending

The question of bank failures using econometric models has been widely researched worldwide but not in Zimbabwe. This paper builds and applies the logit and survival time models to establish the factors that caused banks to fail in Zimbabwe after the December 2003 monetary policy statement. Overall results show that bank-specific, macroeconomic and political factors have all contributed immensely to the collapse of the economy’s banks. Surprisingly, events that happened prior to the monetary policy statement are still in existence, thus policy makers can use the models herein to develop early warning systems
and setting screening conditions for bank license applications.

- by Seedwell T.M. Sithole
- •
- Regression Models, Zimbabwe, Liquidity Crisis, Lessons
- by Daniel S. Martin
- •
- Applied Mathematics, Early Warning, Bank failure, Banking finance

The series of bank failure in Nigeria have raised doubt in the minds of banking and non banking public about the efficacy of the prudential regulator and its frameworks. This is due to the fact that a substantial number of these groups are questioning the roles of the prudential regulator saddles with the responsibility of regulating and supervising the activities of banks together with the laws governing the operation and conduct of banking business in Nigeria. The incessant failure witness in the banking sector over these years is captured by the number of failed banks, spate of non performing credits, the debt and extent of required capitalization, loss of depositors funds and the general impact on the economy all of which underscores the importance of the sector. A study of this nature examined bank failure in Nigeria and those responsible for such series of failures. It was discovered that the Nigeria banking sector regulatory authorities are responsible and are to be blamed for these incessant rates of failures in the banking sector of the Nigeria economy. We conclude that the failure experience in the sector in recent times is attributed to regulatory laxity on the part of the prudential regulators occasioned by their inability and delay to carry out some of its routine, off site, and on site functions as stipulated in the mandate establishing CBN and failures to ensure compliance to the prudential guidelines. The banking system in Nigeria has come under search light in recent times not only because of its intermediation roles but also as a result of the problem rocking the sector in terms of failures and eventual distress among banks. Although, the banking system serves as the nerve center of any modern economy, it facilitates economic growth and provides a mechanism for the transmission of government monetary policy (Golin, 2001). This is because the banks take on public policy function, their regulation and supervision by the government is justified. Moreover, the risks and vulnerabilities that banks confront as a consequence of their very structure and function provide another reason for the authorities to monitor bank operation closely. The series of failure experienced in the banking sector over the years can be captured by the number of failed banks, spate of nonperforming loans, the debt and extent of required capitalization, loss of depositors funds and the general impact on the economy all of which underscores the importance of the sector. These series of failures, distress or collapse witnessed over the period could be attributed to prudential regulatory laxity on the part of the sector regulators which is acceptably blamed to the failure of the CBN to carry out some of its routine functions, inadequate regulatory frameworks or regime, failure to set standards of regulation and ensure compliance by the various commercial banks in the country. These failures grow unabated even when regulations like CBN act of 1958 as amended, BOFIA of 1991 as amended, Prudential Guideline on Asset Classification and Provision for Loan Losses (SAS 10) as well as failed Bank (Recovery of Debts) and Other Financial Malpractices Act of 1994 were all in existence. Looking at this, it can be concluded therefore that the series of bank failures in Nigeria are to be blamed on the prudential regulator or that the regulatory frameworks are inadequate to address the incessant bank failures in the sector. These are questions previous studies have not fully answered. It is therefore the crux of the study to provide answers to the questions.

- by Marshal Iwedi PhD
- •
- Finance, Accounting, Nigeria Economy, Bank failure

This article looks at the key factors behind the failure of the Birkbeck Bank in 1911. Using a wide range of primary source material, it charts how the Bank emerged from its philanthropic roots as a mutual building society in the 1870s to go on and enjoy spectacular growth during the late nineteenth century before eventually faltering and failing in the early twentieth century. Throughout the analysis, particular attention is given to the investment decisions taken by the Bank’s management and the impact that these had on the Bank’s fortunes. In addition, the article also looks at the extent to which the Birkbeck Bank’s overall business model differed from those of other banks in this period. Ultimately, what it shows is that the Bank’s failure to modify its investment strategy quickly enough in response to changing market conditions — most notably the fall in the value of Consols and other gilt-edged securities — proved to be the decisive factor in its eventual collapse. For this reason, the article contends, it is appropriate to categorise the 1911 Birkbeck Bank failure as one caused by strategic inertia rather than excessive risk-taking.

- by Matthew Hollow
- •
- Economic History, History Of London, Strategy (Business), Financial Crisis
- by Christoph Henkel
- •
- International Law, Banking, European Union, Banking and Finance law

This paper is a theoretical exposition into the causes and consequences of bank distress in the Nigerian banking industry. In the last two decades, the Nigerian banking industry similar to what happened in Asia and Europe faced a lot of crises which lead to retardation of economic growth and development. The causes of bank distress are diverse and the consequences enormous. Thus, there is the need to address this issue in order to provide basis for minimising its occurrence in the future. This paper examines these major causes as well as consequences with a view to making contribution to the existing literature and to serve as a podium for sensitising all the stakeholders on the need to systematically monitor the affairs of their banks to stop them from going into the doldrums.

- by andrew simon
- •
- Geology, Geomorphology, Invasive Species, Riparian vegetation
- by Arnoud Boot
- •
- Economic Theory, Applied Economics, Moral Hazard, Industry Structure
- by Zaghdoudi Taha
- •
- Logistic Regression, Bank failure
- by Listya Endang Artiani
- •
- Economics, Latin American Economic History, Distress, Bank failure
- by Franklin Edwards
- •
- Financial System, Moral Hazard, Developing Country, Financial Services
- by Anjan Thakor
- •
- Economic Theory, Applied Economics, Moral Hazard, Industry Structure

The authors review the economics of bank regulation as developed in the contemporary literature. They begin with an examination of the central aspects of modern banking theories in explaining the asset transformation function of intermediaries, optimal bank liability contracts, coordination problems leading to bank failures and their empirical significance, and the regulatory interventions suggested by these considerations. In particular, the

- by Anjan Thakor
- •
- Economic Theory, Applied Economics, Moral Hazard, Industry Structure

This paper estimates the value of the too-big-to-fail (TBTF) subsidy. Using data from the merger boom of 1991–2004, we find that banking organizations were willing to pay an added premium for mergers that would put them over the asset sizes that are commonly viewed as the thresholds for being TBTF. We estimate at least 15billioninaddedpremiumsfortheeightmergerdealsthatbroughttheorganizationstoover15 billion in added premiums for the eight merger deals that brought the organizations to over 15billioninaddedpremiumsfortheeightmergerdealsthatbroughttheorganizationstoover100 billion in assets. In addition, we find that both the stock and bond markets reacted positively to these TBTF merger deals. Our estimated TBTF subsidy is large enough to create serious concern, particularly since the recently assisted mergers have effectively allowed for TBTF banking organizations to become even bigger and for nonbanks to become part of TBTF banking organizations, thus extending the TBTF subsidy beyond banking.

In the second quarter of 2009 the FDIC charged banks a special assessment with the intent of replenishing the deposit insurance fund, which had been depleted by numerous bank failures. Unlike traditional deposit insurance premiums, the special assessment was applied to a bank"s total assets minus Tier 1 capital (net assets), with the maximum that any single institution would pay "capped" at 10 basis points applied to domestic deposits. In this research, we demonstrate that the move to net assets as the assessment base imposes a substantial cost on large institutions, but the cap effectively served to subsidize institutions that fund a high percentage of their assets with non-deposit liabilities. We estimate the magnitude of both the special assessment and the cap savings for the 19 large financial institutions, which were subjected to the regulatory stress tests in 2009, and for a sample of smaller bank, and show that the cap favored large banks but interestingly did ...

- by Scott Hein and +1
- •
- Financial Institutions, Stress Testing, Bank failure, Deposit Insurance

This study is a follow-up to two other studies carried out with other scholars in 2012 and 2014 respectively. While the
two studies combined principal component analysis (PCA) with discriminant analysis (DA), this study extends its frontier by developing an integrated early warning signal which pools PCA with three standard statistical models including
DA, logit and probit models to determine the health status of Nigerian banks. The results show that discriminant analysis, logit and probit models are credible predictors of a bank’s financial status. The results indicate key variables that
are significant to the performance of a bank including variables that measure profitability, liquidity, credit risk and
capital adequacy because their coefficient estimates exhibit consistently statistical significance in the three models. It
can thus be concluded that an early warning model predicated on a comprehensive analysis of a bank’s financial operations concomitant with an adoption of discriminant and logit cum probit estimations could serve as a device for effective supervision to maintain a safe and sound banking system. Applying the research methodology employed in the
study to a more all-inclusive data set that enables the estimation of these prediction models could reveal additional
insights into the processes that engender financial distress of Nigerian banks.

- by Raulin L Cadet
- •
- Monetary Policy, Bank failure
- by Ravi Kunte
- •
- Marketing, Operations Research, Mathematical Programming, Financial Crisis
- by Eddy Langendoen
- •
- Geology, Geomorphology, Shear Strength, Moisture Content
- by Paul Ellinger
- •
- Business, Financial Crisis, Bank failure

The paper delivers a multistate, continuous, nonhomogeneous Markov chain to present a COVID-19 stressed probability of default (PD) model for banks. First it analyzes the theoretical and methodological considerations of bank failure. Then it provides a comprehensive review of earlier empirical bank failure models published in literature. It makes the case for a multistate model design, which has numerous advantages over the conventional binary classification techniques. A formal description of Markov chain modeling is followed by the detailed presentation of empirical model development. Eventually it estimates PDs for a five year forecast horizon with the developed model reflecting COVID-19 crisis impacts.

- by Tamás Kristóf
- •
- Markov chains, Credit Risk, Bank failure

As demonstrated during the financial crisis of 2007-8 and several other times throughout history, bank failures can pose a threat to financial system stability and broader economic growth. The importance of real estate lending to banks' financial viability and the relationship between real estate price swings and specific financial crises throughout American history has been amply demonstrated. In this paper we examine the historical relationship between banks' real estate portfolios and subsequent bank failures using a novel, long-term dataset ranging from 1863 to 2012. We examine banks' real estate loans, banks' total assets and bank failures to test for a relationship between banks' real estate lending and subsequent bank failures. Using the methodology of Pesaran and Shin (1999) and Pesaran et al. (2001), we conduct an Autoregressive Distributed Lag (ADL) " bounds test " to test for a long-run relationship between real estate loans and bank failures. We find evidence of a relationship between banks' real estate loans as a percentage of total assets and failures in subsequent years.

- by John T Jackson
- •
- Economics, Finance and banking, Bank failure
- by Gerard Roland
- •
- Czech Republic, Early Warning, Emerging Market, Emerging market economies
- by Yuliya Demyanyk
- •
- Marketing, Operations Research, Mathematical Programming, Financial Crisis
- by Erik Mosselman
- •
- Environmental Engineering, Civil Engineering, Water resources, Applied Economics

Commentators agree that the crisis that boiled to a bubble in the fall of 2008 (“the Great Recession”) is the gravest downturn since the depression of the 1930s. That makes it one of the two greatest crises in the history of capitalism. And plainly, the crisis continues, yielding severe joblessness and a growing danger of government defaults, bank failures, and stock market crashes. Hundreds of commentators have sought to explain the crisis. Yet much remains murky, even paradoxical. This essay attempts to put the crisis in perspective by mapping the universe of crisis literature. It begins by framing some of the key questions posed in this literature. Next it offers sharply etched reviews of thirteen key books. The result is a multi-faceted portrait of a crisis that is still unfolding.

- by Gabriela Moran
- •
- Sociology, Political Science, Capitalism, Financial Crisis of 2008/2009

There is now a real chance that the Euro member states will not abide by the strict rules of the Stability Pact. Economic and political pressures are currently moving in that direction. What then imposes budgetary discipline on governments? This paper explores how government bond markets and financial regulators could take over the disciplinary role of the Stability Pact. For example, the application of the large exposure rule to public debt should ¶encourage¶ banks to diversify their government bond holdings, shielding countries banking system from bank failures in other countries. Information disclosure and capital adequacy requirements for government bonds should increase the sensitivity of governments borrowing costs with respect to debt, deterring governments from running high budget deficits. Markets need to believe that EMU governments and the ECB will adhere to the Maastricht Treaty and to the no-bail-out clause in particular. The Stability Pact is not essential for the disc...

- by Jan Lemmen
- •
- Business, Financial Regulation, Public Debt, Information disclosure
- by Sergio Fagherazzi
- •
- Geology, Computer Model, Field Survey, Earth Surface Processes
- by Gerald Dwyer
- •
- Monetary Economics, Economic Theory, Applied Economics, Bank failure

Over the last decade, national and international regulatory bodies, in an attempt to lessen the chance of a bank failure, have imposed ever stricter capital adequacy requirements on banks with little or no knowledge of the net benefits of such restrictions. This study tries to right this imbalance by developing a framework for measuring the costs and benefits of capital

- by George M Sheldon
- •
- Bank Capital, Nonparametric Regression, Cost Benefit Analysis, Bank failure

Riparian vegetation strips are widely used by river managers to increase streambank stability, among other purposes. However, though the effects of vegetation on bank stability are widely discussed they are rarely quantified, and generally underemphasize the importance of hydrologic processes, some of which may be detrimental. This paper presents results from an experiment in which the hydrologic and mechanical effects of four riparian tree species and two erosion-control grasses were quantified in relation to bank stability. Geotechnical and pore-water pressure data from streambank plots under three riparian covers (mature trees, clump grasses and bare/cropped turf grass) were used to drive the ARS bank stability model, and the resulting factor of safety (Fs) was broken down into its constituent parts to assess the contribution (beneficial or detrimental) of individual hydrologic and mechanical effects (soil moisture modification, root reinforcement and surcharge). Tree roots were found to increase soil strength by 2–8 kPa depending on species, while grass roots contributed 6–18 kPa. Slope stability analysis based on data collected during bank failures in spring 2000 (following a very dry antecedent period) shows that the mechanical effects of the tree cover increased Fs by 32 per cent, while the hydrologic effects increased Fs by 71 per cent. For grasses the figures were 70 per cent for mechanical effects and a reduction of Fs by 10 per cent for the hydrologic effects. However, analysis based on bank failures in spring 2001 (following a wetter than average antecedent period) showed the mechanical effects of the tree cover to increase Fs by 46 per cent, while hydrologic effects added 29 per cent. For grasses the figures were 49 per cent and −15 per cent respectively. During several periods in spring 2001 the hydrologic effects of the tree cover reduced bank stability, though this was always offset by the stabilizing mechanical effects. The results demonstrate the importance of hydrologic processes in controlling streambank stability, and highlight the need to select riparian vegetation based on hydrologic as well as mechanical and ecological criteria. Published in 2002 by John Wiley & Sons, Ltd.

- by andrew simon
- •
- Geology, Slope Stability, Soil moisture, Data Collection
- by Laurent Weill
- •
- Granger causality, Model development, Financial Stability, Cost Efficiency
- by Sumit Agarwal
- •
- Business, Economics, Banking Regulation, Social Science Research Network
- by Rafael Repullo
- •
- Economic Theory, Applied Economics, Social Welfare, Relationship lending
- by João Santos
- •
- Economic policy, Rate of return, Newspaper, Federal Reserve
- by María Nieto
- •
- Governance, European Union, Regulation, Financial Regulation
- by Prodromos Vlamis
- •
- Real Estate, Financial System, Banking Crisis, BanK Lending

The East Asian crisis highlights the importance of liquidity for smooth functioning of the banking system. It also shows the vulnerabilities that arise as a result of high dependence on international liquidity. This article empirically analyses the influx of liquidity before the crisis and illiquidity during the crisis in finding out whether banks in East Asia held ‘too little’ or ‘too much’ liquidity before and during a crisis and how their vulnerabilities to failure changed as a result of that. Instrumental Variable estimation is used to dissociate the effect of international illiquidity on banks’ liquidity risk during a crisis year. The study finds that the effect of liquidity on the probability of bank failure varies before and during a crisis. The findings also highlight the vulnerabilities of banks to failure as a result of international illiquidity and high reliance on external funding. These findings bring forward the case for stronger regulation of banks’ liquidity, which can be brought forward by better liquidity management.

- by Fazelina Hamid
- •
- East Asia, Instrumental Variables, Bank failure, Liquidity risk