Pre-Crisis Determinants of US Bank Charter Values.
Academy of Banking Studies Journal 2011, July-Dec, 10, 2
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Descrição da editora
INTRODUCTION During the ongoing global financial crisis, the U.S. banking industry experienced a sharp increase in the number of bank failures. Over the seven-year period ending December 31, 2007 there was an average of only 3.57 bank failures per year. By comparison, over the two years ending May 31, 2010 there was an average of 119.5 bank failures per year. (1) In response to this spike in bank failures (and the concurrent damage to the U.S. economy), many observers have argued that U.S. banks took excessive risks leading up to the financial crisis. Calls have increased for tighter government regulation of the banking industry and on July 15, 2010, the U.S. Congress passed legislation designed to dramatically overhaul the financial regulatory system. At the same time, the Basel Committee on Banking Supervision was working to stiffen international banking regulations. Concerned about excessive bank risk-taking, this committee was focused on improving the quality and quantity of bank capital. Not only was the committee considering setting limits on leverage, how much banks can borrow, it was also considering setting limits on executive compensation. (2)