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One size fits all? The differential impact of parent capital on bank failures

Nilufer Ozdemir, Russell Triplett and Cuneyt Altinoz

Finance Research Letters, 2019, vol. 29, issue C, 136-140

Abstract: Recent regulations increased minimum capital standards for bank holding companies. We test the effectiveness of this action in preventing bank failures during the sub-prime mortgage crisis. We find that while holding company capital is the most influential variable in the failures of banks affiliated with multi-bank holding companies, this is not the case for banks affiliated with a one-bank holding company. For these banks, the bank's own characteristics are more influential than group capital, meaning the established standards may not be universally effective.

Keywords: Bank failure; Bank holding company; Financial crisis; Bank regulation; G01; G21; G28; G33 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:29:y:2019:i:c:p:136-140

DOI: 10.1016/j.frl.2019.03.006

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