Sources of bank charter values
Download
1 / 23

Sources of Bank Charter Values - PowerPoint PPT Presentation


  • 191 Views
  • Updated On :

Sources of Bank Charter Values. Frederick Furlong and Simon H. Kwan Federal Reserve Bank of San Francisco Disclaimer: Do not represent the views of the Federal Reserve. Rebound in BHC charter value ratios. Outline. Potential reasons for positive charter values in banking

Related searches for Sources of Bank Charter Values

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Sources of Bank Charter Values' - bernad


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Sources of bank charter values

Sources of Bank Charter Values

Frederick Furlong

and

Simon H. Kwan

Federal Reserve Bank of San Francisco

Disclaimer: Do not represent the views of the Federal Reserve



Outline
Outline

  • Potential reasons for positive charter values in banking

  • Developments in U. S. banking that may have affected charter values

  • Data and empirical model

  • Empirical findings on factor affecting charter value ratios


Bank specific factors affecting cv
Bank-specific factors affecting CV

  • Funding

    • Federal safety net, reliance on insured deposits

    • Other sources of funding

  • Transactions services (access to payments system)

  • Portfolio lending

    • Synergies in deposit taking and lending

  • Other Non-interest income

    • Credit services—e.g. loan commitments

    • Economies of scope in financial services

  • Operational efficiency

    • Economies of scale

    • X efficiency


  • Developments in u s banking that may have affected charter values
    Developments in U. S. banking that may have affected charter values

    • Restructuring

    • Financial innovation

    • Adoption of technology affecting operational efficiency

    • Legislative, regulatory, supervisory initiatives to limit conjectural guarantees from federal safety net






    Data values

    • Federal Reserve Y-9C data

    • Sample period: 1986 Q2 to 2003 Q4

      • Sub-periods: 1986 Q2 to 1994 Q4

        1995 Q1 to 2003 Q4

    • BHC stock price data from CRSP

    • Final sample: 624 BHCs with 22,338 firm-quarter obs.

    • Size classes: Large (top 10th percentile by assets)

      Medium (50th to 90th percentile )

      Small (bottom 50th percentile)














    Conclusions
    Conclusions values

    • Bank-specific characteristics

      • Deposits: consistent positive effects from transactions and core deposits on CV ratios

        • No change in marginal effects, decline in shares

      • Portfolio lending: only consistent positive effect on CV ratios from consumer lending for large BHCs

      • Non-interest revenues: consistent positive effect on CV ratio for large BHCs

        • Increase in marginal effect, rise in share

      • CV ratios related to measure of efficiency

        • No change in marginal effect, rise in measured efficiency

    • Macro financial variable appear to have contributed to movements and some of the net rise in measured CV ratios


    ad