Corporate Ownership and the Thrift Crisis

Cordell, Lawrence R.; Wohar, Mark E.

doi:10.1086/467296

Cited by 52 publications

(26 citation statements)

References 13 publications

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“…We find the most relevant evidence for this issue in the comparison of mutual institutions with the banks in the United States. In general, these authors conclude that banks have more incentives to take risks (Cordell, MacDonald, & Wohar, 1993;Esty, 1997;Karels & McClatchey, 1999). However, this evidence is not directly transferable to the Spanish case.…”

Section: Introductionmentioning

confidence: 84%

Risk-taking behaviour and ownership in the banking industry: The Spanish evidence

García‐Marco

Fernández

2008

Journal of Economics and Business

169

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Section: Introductionmentioning

confidence: 84%

Risk-taking behaviour and ownership in the banking industry: The Spanish evidence

García‐Marco

Fernández

2008

Journal of Economics and Business

169

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“…MBs have higher expenses (O'Hara, 1981;Mester, 1989;Gropper and Beard, 1995;Esty, 1997), lower asset risk (O'Hara, 1981;Fraser and Zardkoohi, 1996;Esty, 1997) and lower default risk (Rasmusen, 1988;Cordell et al, 1993;Hansmann, 1996;Fraser and Zardkoohi, 1996). However, Altunbas et al (2001) find that German MBs have slight cost and profit advantages over German POBs.…”

Section: Introductionmentioning

confidence: 99%

Ownership structure, risk and performance in the European banking industry

Iannotta

Nocera

Sironi

2007

Journal of Banking & Finance

792

565

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International audienceWe compare the performance and risk of a sample of 181 large banks from 15 European countries over the 1999-2004 period and evaluate the impact of alternative ownership models, together with the degree of ownership concentration, on their profitability, cost efficiency and risk. Three main results emerge. First, after controlling for bank characteristics, country and time effects, mutual banks and government-owned banks exhibit a lower profitability than privately owned banks, in spite of their lower costs. Second, public sector banks have poorer loan quality and higher insolvency risk than other types of banks while mutual banks have better loan quality and lower asset risk than both private and public sector banks. Finally, while ownership concentration does not significantly affect a bank's profitability, a higher ownership concentration is associated with better loan quality, lower asset risk and lower insolvency risk. These differences, along with differences in asset composition and funding mix, indicate a different financial intermediation model for the different ownership forms

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“…Second, significant numbers of change of control transactions occurred in existing state stock institutions in which small institutions were acquired and subsequently experienced dramatic asset growth and ,expansion into riskier activities. Third, Cordell, MacDonald, and Wohar (1993) provide evidence that excessive risk taking in the 1980s was greatest in those stock institutions in existence before 1980 and in pre-1980 mutual to stock conversions whose residual claimants benefited the most from mispriced government guarantees.…”

Section: Failure Ratesmentioning

confidence: 93%

Risk taking and failure in de novo savings and loans in the 1980s

1996

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This article examines failure rates in de novo S&Ls that initiated operations during the 1980-1986 period. Overall failure rates are similar to those for existing institutions but are found to vary significantly by location, time of charter, and organizational form. Both univariate tests and results from a probability-of-failure model indicate that inadequate capital, economic stress, poor management of higher risk lending allowed by broader powers, and operating inefficiencies contributed significantly to the likelihood of failure. Use of brokered funds and rapid asset growth are also significantly related to failure likelihood. Interestingly, for those S&Ls which eventually failed, rapid asset growth and high proportions of nonperforming assets actually delayed the timing of their failure. We interpret this to be the result of regulatory forbearance. We also find significant differences between the financial characteristics of de novo and non-de novo S&Ls.

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Corporate Ownership and the Thrift Crisis

Cited by 52 publications

References 13 publications

Risk-taking behaviour and ownership in the banking industry: The Spanish evidence

Risk-taking behaviour and ownership in the banking industry: The Spanish evidence

Ownership structure, risk and performance in the European banking industry

Risk taking and failure in de novo savings and loans in the 1980s

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