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Journal Article
Banking antitrust: are the assumptions still valid?
In bank antitrust analyses, banking regulators rely on certain assumptions about products and services of banks, the markets in which they operate, competitors within those markets, and the effects of mergers or acquisitions on those markets. During the 1990s, financial innovation and changes in banking regulations changed the landscape in which banks compete. Consequently, the assumptions behind antitrust analyses have come into question. This article surveys recent studies relevant for assessing the validity of the assumptions that underlie banking antitrust. Most of the evidence supports ...
Journal Article
Could a CAMELS downgrade model improve off-site surveillance?
The Federal Reserve?s off-site surveillance system includes two econometric models that are collectively known as the System for Estimating Examination Ratings (SEER). One model, the SEER risk rank model, uses the latest financial statements to estimate the probability that each Fed-supervised bank will fail in the next two years. The other component, the SEER rating model, uses the latest financial statements to produce a ?shadow? CAMELS rating for each supervised bank. Banks identified as risky by either model receive closer supervisory scrutiny than other state-member banks.> Because many ...
Journal Article
Big banks in small places: are community banks being driven out of rural markets?
The shares of total U.S. banking assets and deposits held by the very largest banking organizations have increased markedly over the past 25 years, while the shares held by small ?community? banks have declined. Advances in information technology may have reduced the advantages of small scale, close proximity, and local ties that traditionally have given small, community-focused banks a competitive advantage in lending to small businesses and other ?informationally opaque? borrowers. This article examines trends in deposit shares of banks of different sizes in rural U.S. counties. If the ...
Conference Paper
Discussant comments on regulatory intervention
Journal Article
Problem business loans rise at large banks
Journal Article
Monetary policy and relative prices in an incomes policy
Working Paper
Can feedback from the jumbo-CD market improve off-site surveillance of community banks?
We examine the value of feedback from the jumbo-certificate-of-deposit (CD) market in the off-site surveillance of community banks. Using accounting data, we construct proxies for default premiums on jumbo CDs. Then, we produce rank orderings of community banks -- defined as institutions holding less than $500 million in assets (constant 1999 dollars) -- based on these proxies. Next, we use an econometric surveillance model to generate rank orderings based on the probability of encountering financial distress. Finally, we compare these rank orderings as tools for flagging emerging problems. ...
Journal Article
Interpreting the annual ranges for money growth