Financial fragility under implicit insurance scheme: Evidence from the collapse of Thai financial institutions

Chaiyasit Anuchitworawong

No 2004-16, CEI Working Paper Series from Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University

Abstract: Using the Thai experience as a clinical study of a financial crisis, we investigate financial failures of Thai financial institutions. This study augments the CAMEL perspective by considering corporate governance and the moral hazard problems under the state of implicit government guarantee. The overall results suggest that high-replicated CAMEL ratings and downgrades of the ratings based on accounting-based information are likely to be important indicators of bank fragility. The ownership-based incentives of the largest shareholders and the level of risk associated with moral hazard problems are also factors that help discriminate sound and unsound financial institutions.

Keywords: CAMEL rating; incentives; deposit insurance; financial failure; Thai financial institutions (search for similar items in EconPapers)
JEL-codes: G13 G21 G34 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2004-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:hit:hitcei:2004-16

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