The long-term role of non-traditional banking in profitability and risk profiles: Evidence from a panel of U.S. banking institutions

Nicholas Apergis ()

Journal of International Money and Finance, 2014, vol. 45, issue C, 61-73

Abstract: The goal of this empirical study is to identify empirically and on a panel basis how non-traditional bank activities affect directly the profitability and risk profiles of the financial institutions involved in such activities. Through a dataset that covers 1725 U.S. financial institutions involved in non-traditional bank activities spanning the period 2000–2013 and the methodology of panel cointegration, the empirical findings document that non-traditional bank activities exert a positive effect on both the profitability and the insolvency risk. The results could be important for regulators given they could serve as a pre-warning signal that sends a clear message to regulators about the potential systemic risk that exists within the financial markets.

Keywords: Non-traditional bank activities; Profitability; Insolvency risk; U.S. banks; Panel data (search for similar items in EconPapers)
JEL-codes: C33 G20 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:45:y:2014:i:c:p:61-73

DOI: 10.1016/j.jimonfin.2014.03.003

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