This study investigates the existence of psychological barriers in the Dow Jones Industrial Average, the S&P 500, and six foreign stock indices. It is believed by many in the investment community that index levels that are multiples of 100 serve as barriers, and that markets may resist crossing these barriers. Although return dynamics in the neighborhood of barrier points are not identical for all series studied, we find aberrations in the conditional means and variances consistent with psychological barriers. In five of the eight indices studied, conditional mean returns are significantly higher after crossing a barrier as part of an upward move, while only two series exhibit significant mean effects after crossing a barrier as part of a downward move. In seven of the eight series studied, we find significant conditional variance effects coincident with a barrier crossing. In addition, most series exhibit evidence of autoregressive conditional heteroskedastic (ARCH), generalized ARCH (GARCH), and leverage effects.
In this article I investigate the regulatory burden for small U.S. banks around major crisis-based regulatory programs using measures of profit, cost, and productivity from 1991 to 2014. After the passage of the Federal Deposit Insurance Corporation Improvement Act, there is little evidence consistent with increased regulatory burden. After the passage of the USA PATRIOT Act, the percentage change in employees was positive, and average pay was higher for small banks. After the passage of the Dodd-Frank Act, five of six regime-shift indicators were consistent with increased regulatory burden, with lower pretax return on assets, lower loans per employee, lower technology and fixed-asset expenditures, and higher percentage change in employees and salaries-to-assets in panel regressions.
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