The Effect of Terminating Enforcement Actions on the Nation's Problem Banks

Authors

Benjamin Doehr, Grinnell CollegeFollow

Abstract

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.

Recommended Citation

Doehr, Benjamin (2015) "The Effect of Terminating Enforcement Actions on the Nation's Problem Banks," Undergraduate Economic Review: Vol. 11: Iss. 1, Article 15.
Available at: https://digitalcommons.iwu.edu/uer/vol11/iss1/15