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Depositor market discipline: New evidence from selling failed banks

Philip Molyneux, Vineet Upreti Orcid Logo, Tim Zhou Orcid Logo

International Review of Financial Analysis, Volume: 89, Start page: 102767

Swansea University Authors: Vineet Upreti Orcid Logo, Tim Zhou Orcid Logo

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DOI (Published version): 10.1016/j.irfa.2023.102767

Abstract

This paper studies depositor behavior following the acquisition of failed banks by healthy banks in FDIC-supervised transactions. Using a US bank branch-based dataset spanning 2007 to 2014 we find that failed bank depositors discipline acquiring banks post-resolution. This appears to be related to f...

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Published in: International Review of Financial Analysis
ISSN: 1057-5219
Published: Elsevier BV 2023
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URI: https://cronfa.swan.ac.uk/Record/cronfa63754
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first_indexed 2023-06-29T16:55:04Z
last_indexed 2023-06-29T16:55:04Z
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spelling v2 63754 2023-06-29 Depositor market discipline: New evidence from selling failed banks 8f0fcae811cfbfabf93901185944c055 0000-0002-9803-7551 Vineet Upreti Vineet Upreti true false c132216bf49e0544a968bb3919686327 0000-0002-0830-2316 Tim Zhou Tim Zhou true false 2023-06-29 BAF This paper studies depositor behavior following the acquisition of failed banks by healthy banks in FDIC-supervised transactions. Using a US bank branch-based dataset spanning 2007 to 2014 we find that failed bank depositors discipline acquiring banks post-resolution. This appears to be related to features of the acquiring banks' asset quality and loan composition, but it may also be linked to irrational desciplinary behavior or post acquisition integration issues. We also find some evidence that depositor market discipline may have an impact on the competitive fetaures of local banking markets post resolution. Journal Article International Review of Financial Analysis 89 102767 Elsevier BV 1057-5219 FDIC, Banks, Resolution, Market discipline, Depositors 1 10 2023 2023-10-01 10.1016/j.irfa.2023.102767 http://dx.doi.org/10.1016/j.irfa.2023.102767 COLLEGE NANME Accounting and Finance COLLEGE CODE BAF Swansea University SU Library paid the OA fee (TA Institutional Deal) Swansea University 2023-12-22T08:11:13.3308715 2023-06-29T16:00:29.3312725 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Philip Molyneux 1 Vineet Upreti 0000-0002-9803-7551 2 Tim Zhou 0000-0002-0830-2316 3 63754__28094__c405f6967214478a8235d143531dd18f.pdf 63754.pdf 2023-07-12T14:13:59.2731634 Output 773449 application/pdf Version of Record true © 2023 The Authors. Published by Elsevier Inc. Distributed under the terms of a Creative Commons Attribution 4.0 License (CC BY 4.0). true eng http://creativecommons.org/licenses/by/4.0/
title Depositor market discipline: New evidence from selling failed banks
spellingShingle Depositor market discipline: New evidence from selling failed banks
Vineet Upreti
Tim Zhou
title_short Depositor market discipline: New evidence from selling failed banks
title_full Depositor market discipline: New evidence from selling failed banks
title_fullStr Depositor market discipline: New evidence from selling failed banks
title_full_unstemmed Depositor market discipline: New evidence from selling failed banks
title_sort Depositor market discipline: New evidence from selling failed banks
author_id_str_mv 8f0fcae811cfbfabf93901185944c055
c132216bf49e0544a968bb3919686327
author_id_fullname_str_mv 8f0fcae811cfbfabf93901185944c055_***_Vineet Upreti
c132216bf49e0544a968bb3919686327_***_Tim Zhou
author Vineet Upreti
Tim Zhou
author2 Philip Molyneux
Vineet Upreti
Tim Zhou
format Journal article
container_title International Review of Financial Analysis
container_volume 89
container_start_page 102767
publishDate 2023
institution Swansea University
issn 1057-5219
doi_str_mv 10.1016/j.irfa.2023.102767
publisher Elsevier BV
college_str Faculty of Humanities and Social Sciences
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hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Management - Accounting and Finance{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management - Accounting and Finance
url http://dx.doi.org/10.1016/j.irfa.2023.102767
document_store_str 1
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description This paper studies depositor behavior following the acquisition of failed banks by healthy banks in FDIC-supervised transactions. Using a US bank branch-based dataset spanning 2007 to 2014 we find that failed bank depositors discipline acquiring banks post-resolution. This appears to be related to features of the acquiring banks' asset quality and loan composition, but it may also be linked to irrational desciplinary behavior or post acquisition integration issues. We also find some evidence that depositor market discipline may have an impact on the competitive fetaures of local banking markets post resolution.
published_date 2023-10-01T08:11:13Z
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score 11.017731

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