This paper examines whether the Federal Deposit Insurance Corporation's supervisory actions promote improved performance at problem banks. I show that during the three-year period following the termination of a supervisory action, return on assets rises by 10 to 20 basis points. The reaction of capital markets to the termination results in a 1.7 basis point increase in return on assets, while management actions post-termination result in a 1.6 basis point decrease in return on assets.
"The Effect of Terminating Enforcement Actions on the Nation's Problem Banks,"
Undergraduate Economic Review: Vol. 11
, Article 15.
Available at: http://digitalcommons.iwu.edu/uer/vol11/iss1/15