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| Author: | |
| Title: | Changes in market perception of riskiness: The case of too-big-to-fail |
| Journal: | Journal of Financial Research
1997 : Vol. 20:3, p. 389-406 |
| Index terms: | CURRENCY BANKING EQUITY CAPITAL |
| Language: | eng |
| Abstract: | In 1984, the Comptroller of the Currency stated that the eleven largest banking firms were "too big to fail," implying they would receive de facto 100 percent deposit insurance. The question is whether this announcement altered the market's perception of the riskiness of all banking organizations, not just those included in the Comptroller's statement. We address this question with two tests. First, through the examination of changes in institutional equity ownership from 1980 through 1988, we find that the announcement is associated with increases in institutional ownership at a time when a comparable set of nonfinancial firms saw reductions in institutional holdings. |
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