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Reciprocal brokered deposits, bank risk, and recent deposit insurance policy

Li, Guo; Shaffer, Sherrill

Description

This study provides new evidence regarding reciprocal brokered deposits (RBDs), regulatory responses, and bank risk, contributing to prior studies in four ways. First, using updated financial Call Report data and bank failure data through 2012, we re-examine the moral hazard hypothesis that banks using RBDs exhibit higher risk. Second, we uncover a previously overlooked positive association between RBDs and banks' cost of failure. Third, we apply Granger causality tests; and finally, we test...[Show more]

dc.contributor.authorLi, Guo
dc.contributor.authorShaffer, Sherrill
dc.date.accessioned2016-02-24T22:41:04Z
dc.identifier.issn1062-9408
dc.identifier.urihttp://hdl.handle.net/1885/98550
dc.description.abstractThis study provides new evidence regarding reciprocal brokered deposits (RBDs), regulatory responses, and bank risk, contributing to prior studies in four ways. First, using updated financial Call Report data and bank failure data through 2012, we re-examine the moral hazard hypothesis that banks using RBDs exhibit higher risk. Second, we uncover a previously overlooked positive association between RBDs and banks' cost of failure. Third, we apply Granger causality tests; and finally, we test whether the FDIC's recent revision of its pricing discourages the use of RBDs and weakens its association with bank risk. The findings provide a more precise and nuanced understanding of banks' use of RBDs.
dc.publisherElsevier
dc.sourceNorth American Journal of Economics and Finance
dc.titleReciprocal brokered deposits, bank risk, and recent deposit insurance policy
dc.typeJournal article
local.description.notesImported from ARIES
local.identifier.citationvolume33
dc.date.issued2015
local.identifier.absfor140210 - International Economics and International Finance
local.identifier.ariespublicationU3488905xPUB5820
local.type.statusPublished Version
local.contributor.affiliationLi, Guo, Fannie Mae
local.contributor.affiliationShaffer, Sherrill, College of Asia and the Pacific, ANU
local.description.embargo2037-12-31
local.bibliographicCitation.startpage366
local.bibliographicCitation.lastpage384
local.identifier.doi10.1016/j.najef.2015.07.001
dc.date.updated2016-02-24T10:09:08Z
local.identifier.scopusID2-s2.0-84940753006
CollectionsANU Research Publications

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