Differential bank behaviors around the Dodd–Frank Act size thresholds

Christa H.S. Bouwman, Hu, Shuting (Sophia) and Shane A. Johnson

Journal of Financial Intermediation, 2018, vol. 34, issue C, 47-57

Abstract: The Dodd–Frank Act created differential regulatory requirements for banks above specified asset size thresholds. Event study results imply greater expected net regulatory costs for above-threshold banks. Consistent with hypotheses that near-below-threshold banks alter their behavior to attempt to avoid or delay the regulatory costs and/or to ensure growth that they do experience is highly beneficial, we find that near-below-threshold banks grow assets, risk-weighted assets, and total loans more slowly, and charge higher rates on commercial loans. The results suggest that the Dodd–Frank Act created costs that near-below-threshold banks attempt to avoid by altering their behaviors in economically important ways.

Keywords: Dodd–Frank Act; Bank stress tests; Regulatory disclosure; Bank size; Lending; Credit availability; Loan pricing; Bank equity capital ratios (search for similar items in EconPapers)
JEL-codes: G18 G21 G28 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1042957318300111
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinin:v:34:y:2018:i:c:p:47-57

DOI: 10.1016/j.jfi.2018.01.005

Access Statistics for this article

Journal of Financial Intermediation is currently edited by Elu von Thadden

More articles in Journal of Financial Intermediation from Elsevier
Bibliographic data for series maintained by Catherine Liu ().