The Costs of Closing Failed Banks: A Structural Estimation of Regulatory Incentives

• 成果类型: Article
• 署名作者: Kang, Ari; Lowery, Richard; Wardlaw, Malcolm
• 署名单位: University of Texas System; University of Texas Austin
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhu076
• 发表日期: 2015
• 页码: 1060
• 关键词: deposit insurance; financial fragility; debt; runs; determinants; experience; failures; MODEL

摘要

We estimate a dynamic model of the decision to close a troubled bank. Regulators trade off an aversion to closing banks against the risk that allowing a bank to continue will raise the eventual costs to the deposit insurance fund. Using a conditional choice probability approach, we estimate the costs associated with closing banks, both in direct costs to the insurance fund and in other costs perceived by regulators, either social or personal. We find that delayed closures were driven by a desire to defer costs, an aversion to closing the largest and smallest troubled banks, and political influence.