search query: @author Osborne, D. K. / total: 1
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Author: | Osborne, D. K. Lee, S. |
Title: | Effects of Deposit Insurance Reform on Moral Hazard in US Banking |
Journal: | Journal of Business Finance and Accounting
2001 : VOL. 28:7-8, p. 979-992 |
Index terms: | BANKING RISK MORAL HAZARD |
Language: | eng |
Abstract: | In cross sections of US banks before the deposit- insurance system was reformed in the early 1990s, bank risk-taking was positively associated with bank size and negatively associated with the value of bank charters and bank capital. These empirical associations have an easy theoretical interpretation.-Bank size is positively related, while charter value and capital are negatively related, to the moral hazard associated with flat insurance premiums and other aspects of a laxly administered system. Hence the observed associations of risk-taking with size, charter value, and capital reflected the expected positive relation between moral hazard and risk-taking. The authors test the hypothesis that the three associations became weaker after reform. |
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