Does Market Discipline Impact Bank Charter Value? The Case for Australia and Canada"

Mamiza Haq, Necmi Avkiran and Amine Tarazi
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Mamiza Haq: UQ [All campuses : Brisbane, Dutton Park Gatton, Herston, St Lucia and other locations] - The University of Queensland
Necmi Avkiran: UQ [All campuses : Brisbane, Dutton Park Gatton, Herston, St Lucia and other locations] - The University of Queensland

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Abstract: This paper analyses the relationship between market discipline and bank charter value using a panel dataset of publicly-listed domestic banks in Australia and Canada over the 1995-2011 periods, with particular focus on the 2007/2008 global financial crisis (GFC). Overall, our results show a positive relationship between market discipline and bank charter value, although this has reduced in the post-GFC period. Furthermore, our findings reveal that in the presence of market discipline, bank capital, contingent liabilities, and non-interest income are important sources of charter value. These findings have important policy implications related to bank safety and soundness. The results are robust to model specification.

Keywords: global financial crisis; charter value; market discipline (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

Published in Accounting and Finance, 2019, 59 (1), pp.253-276

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Journal Article: Does market discipline impact bank charter value? The case for Australia and Canada (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01360863

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