Join Dr John Kandrac on 4 June 2018 to hear about ‘The Effect of Bank Supervision on Risk Taking: Evidence from a Natural Experiment’.
14:00 - 16:00
Essex Business School, EBS.2.40
Dr John Kandrac
Lectures, talks and seminars
Essex Business School
In this paper, we document a causal effect of supervision on financial institutions' willingness to take risk. Exploiting an exogenous reduction in the supervision of thrifts, we find that affected thrifts took on much more risk relative to their unaffected counterparts that were subject to identical regulations. Subsequent to the emergency enlistment of supervisory staff in the affected region, additional risk taking by the affected institutions ceased. Further, we show that the reduction in supervisory capacity resulted in more frequent and costly failures. None of these patterns are present in commercial banks subject to a different primary supervisory agent but otherwise similar to the thrifts in our sample.
Dr John Kandrac is a Principal Economist at Board of Governors of the Federal Reserve System. His current research topics include The Role of Banks in Monetary Transmission Effects of Large-Scale Asset Purchases. For a full list of his publications please see: https://www.federalreserve.gov/econres/john-kandrac.htm
This is an open event, there is no need to book. Please feel free to attend and bring your colleagues, classmates and friends.