Regulatory leniency and the cost of deposits

• 成果类型: Article; Early Access
• 署名作者: Iselin, Michael; Nicoletti, Allison; Ott, Jacob; Zhang, Haiwen (Helen)
• 署名单位: University of Minnesota System; University of Minnesota Twin Cities; University of Pennsylvania; Purdue University System; Purdue University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-025-09894-4
• 发表日期: 2025
• 关键词: market discipline; RISK

摘要

We examine whether variation in regulatory leniency is associated with the cost of deposits in the banking industry. We predict that lenient regulatory supervision allows for greater bank risk-taking due to delayed intervention, resulting in a higher cost of deposits. Our main finding is a positive association between banks' cost of uninsured deposits and the leniency of their state regulators, incremental to observable measures of risk and performance. We further show that this result is stronger for riskier banks and when uninsured depositors have a greater ability or incentive to influence deposit rates. These findings suggest that the leniency of bank regulators is priced in uninsured deposit rates and further our understanding of the factors associated with regulatory leniency in the banking industry.