Regulatory enforcement: discipline for BHC-affiliated banks

Chris Tsoumas ()
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Chris Tsoumas: Hellenic Open University

Empirical Economics, 2021, vol. 60, issue 2, No 8, 737-772

Abstract: Abstract I examine the disciplinary response of non-punished BHC-affiliated banks with respect to capitalization, risk, liquidity and size to enforcement actions of differing severity imposed on the punished members of the BHC group in the USA over the 2000–2014 period. The results show that a response to more severe enforcement actions is generally present, although it is only partly adequate from a regulatory perspective and is much more pronounced when the action has been imposed on the BHC itself. Moreover, the organizational characteristics of BHCs, such as majority stake ownership and increased market scrutiny, affect the disciplinary behavior of the affiliate(s). Finally, less severe enforcement actions seem to cause a disciplinary response of non-punished BHC-affiliate(s) in the post-crisis period.

Keywords: Formal enforcement actions; Banks; Discipline; Regulation; Panel (search for similar items in EconPapers)
JEL-codes: C33 G01 G21 G28 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s00181-019-01771-9

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