Deposit Insurance and Wealth Effects: The Value of Being "Too Big to Fail."
O'Hara, Maureen and
Journal of Finance, 1990, vol. 45, issue 5, pages 1587-1600
This paper investigates the effect on bank equity values of the Comptroller of the Currency's announcement that some banks were "too big to fail" and that for those banks total deposit insurance would be provided. Using an event study methodology, the authors find positive wealth effects accruing to too-big-to-fail banks, with corresponding negative effects accruing to nonincluded banks. They demonstrate that the magnitude of these effects differed with bank solvency and size. The authors also show that the policy to which the market reacted was that suggested by the Wall Street Journal and not that actually intended by the Comptroller. Copyright 1990 by American Finance Association.
References: Add references at CitEc
Citations View citations in EconPapers (81) Track citations by RSS feed
Downloads: (external link)
http://links.jstor.org/sici?sici=0022-1082%2819901 ... O%3B2-K&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:bla:jfinan:v:45:y:1990:i:5:p:1587-1600
Ordering information: This journal article can be ordered from
Access Statistics for this article
Journal of Finance is currently edited by December
More articles in Journal of Finance from American Finance Association Contact information at EDIRC.
Series data maintained by Wiley-Blackwell Digital Licensing ().