Ownership Structure, Charter Value, and Risk-Taking Behavior for Thrifts

A. Sinan Cebenoyan, Elizabeth S. Cooperman and Charles Register ()

Financial Management, 1999, vol. 28, issue 1

Abstract: This paper investigates the relationships among manager ownership, charter value, and thrift risk-taking for 1986 to 1995, a decade of significant regulatory change. We hypothesize that during periods of regulatory laxity and low charter values, manager-owned thrifts are likely to engage in unprofitable risk-taking. However, for periods of regulatory efficacy and high charter values, manager-owners are likely to engage in profitable risk-taking. In support of these premises, we find that manager-owned thrifts exhibit unprofitable risk-taking in the mid-1980s, years of regulatory laxity and low charter values, but demonstrate profitable risk-taking in the mid-1990s, a period of more stringent regulations and high charter values.

Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:fma:fmanag:cehenoyan99

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