Bank Regulation in the United States

Barth, James R.; Li, Tong; Lu, Wenling

doi:10.1093/cesifo/ifp026

Cited by 19 publications

(12 citation statements)

References 3 publications

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“…By contrast, the span of regulatory space -visualised in terms of banking assets per capita (at the county level) in the upper panel of Figure 5 -presents a different feature of the geographical extent of regulatory influence for the three main banking regulators: the FDIC is the undisputed regulator of middle America, covering the depository activities of most of America's Heartland more densely than either the Fed or the OCC. In many ways, this pattern is fully consistent with US regulatory history and the evolution of its financial frontier from the coasts to the rapidly developing urban system in Midwest and the Sunbelt (Conzen, 1975;Calomiris, 2000;Barth, Liy, and Luy, 2010;Bieri, 2014b). In other words, the institutional divides of US regulatory space thus trace out the frontiers of past financial crises.…”

Section: Regulatory Governance and The Structural Change Of Us Bankingsupporting

confidence: 63%

Regulatory space and the flow of funds across the hierarchy of money

Bieri¹

2017

Handbook on the Geographies of Money and Finance

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Section: Regulatory Governance and The Structural Change Of Us Bankingsupporting

confidence: 63%

Regulatory space and the flow of funds across the hierarchy of money

Bieri¹

2017

Handbook on the Geographies of Money and Finance

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“…122 Similarly, the 1999 Gramm-Leach-Bliley Act 123 was the key final chapter in a dismantling of barriers between commercial and investment banking as it expressly permitted the creation of full-service financial holding companies. 124 Deregulation duly helped to transform the formerly "boring" banking sector. Banks The largest U.S. commercial banks also became increasingly highly leveraged as the demand instability (variation in growth rates).…”

Section: B Bigger Banksmentioning

confidence: 99%

The Corporate Governance Movement, Banks, and the Financial Crisis

Cheffins¹

2015

Theoretical Inquiries in Law

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This Article discusses why a “corporate governance movement” that commenced in the United States in the 1970s became an entrenched feature of American capitalism and describes how the chronology differed in a potentially crucial way for banks. The Article explains corporate governance’s emergence and staying power by reference to changing market conditions and a deregulation trend that provided executives with unprecedented managerial discretion as the twentieth century drew to a close. With banking the historical pattern paralleled general trends in large measure. Still, while the “imperial” CEO who achieved prominence in the 1980s became outmoded for the most part after corporate scandals at the start of the 2000s, this was not the case with large financial companies. The continued boldness of “star” CEOs in the financial services industry plausibly contributed to the market turmoil of 2008, but the financial crisis emphatically ended the corporate governance “free pass” banks had enjoyed.

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“…The individual and collective value and risk of these exposures are difficult for banks to convey to outsiders and for outsiders to evaluate, especially during periods of financial system stress (Flannery et al 2013). This difficulty is particularly high for banks that expand beyond traditional lending and depositacceptance activities to engage in derivatives, securities, and other complex transactions (Barth et al 2009;Acharya 2014;Acharya and Ryan 2016). Moreover, banks are subject to various agency conflicts due to their high leverage and the existence of information asymmetries between banks and their debt and equity claimants, as well as among these claimants (Beatty and Liao 2014;Acharya and Ryan 2016).…”

Section: Introductionmentioning

confidence: 99%

Do Bank Regulation and Supervision Displace Bank Auditing?

Ghosh,

Jarva,

Ryan

2017

SSRN Journal

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We hypothesize that bank regulatory and supervisory activities substitute for bank auditing activities, providing auditors with incentives to expend less effort on audits of banks than on audits of similar firms not subject to regulation and supervision. We show that banks exhibit fewer internal control and accounting problems, as measured by the frequencies of disclosed material internal control weaknesses and financial statement restatements, than do similar firms. We show that auditors expend less effort, as indicated by lower audit fees and shorter audit report lags, in audits of banks than in audits of similar firms, more so when bank regulation and supervision are more intense. Lastly, we show that banks are more likely than similar firms to exhibit two types of earnings management that are of minor concern to bank regulators and supervisors but have capital market consequences and so should concern auditors: more frequent small positive earnings changes and longer strings of earnings increases. Prior research shows that these types of earnings management have capital market consequences, which suggests they may lead to reduced market discipline over banks. We expect these results to be of interest to bank and auditing policymakers.

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Bank Regulation in the United States

Cited by 19 publications

References 3 publications

Regulatory space and the flow of funds across the hierarchy of money

Regulatory space and the flow of funds across the hierarchy of money

The Corporate Governance Movement, Banks, and the Financial Crisis

Do Bank Regulation and Supervision Displace Bank Auditing?

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