For How Long are Newly Chartered Banks Financially Fragile?

delete Pub Date : 2000-09-01 DOI:10.2139/ssrn.265751
Robert DeYoung
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引用次数: 14

Abstract

We examine the financial performance of 1,664 commercial banks chartered between 1980 and 1985, a period of intense chartering activity just preceding the banking recession of the late-1980s. We compare new banks to a benchmark sample of 2,047 small established banks. Using a split population duration model, we estimate the probability distribution of long-run failure for both sets of banks over a 14 year period, and assess how regulatory, environmental, and bank specific conditions affect that probability distribution. We find that the fragility of a new bank varies over time in a fairly regular ‘life cycle’ pattern, but that how this basic life cycle pattern is positioned vis a vis the business cycle also matters. On average, new banks are initially less likely to fail than established banks; after about four years they become more likely to fail than established banks; and as time passes and new banks mature they fail at rates similar to established banks. But banks chartered just prior to the banking recession failed at the highest rates, and their estimated hazard functions followed an extreme life cycle shape. State laws restricting the acquisition of de novo banks are associated with higher rates of new bank failure, but easy-entry chartering policies are not. We find that de novo failure is more sensitive to capital levels than established bank failure, evidence that Justifies recent increases in minimum capital requirements for de novo banks. Finally, our results suggest that early warning signals may be easier to identify for de novo banks than for established banks, perhaps because banks in the early stages of their life cycles are less heterogeneous and hence simpler to model than mature banks.
新特许银行的财务脆弱会持续多久?
我们研究了1664家特许商业银行在1980年至1985年间的财务表现,这是在20世纪80年代末银行业衰退之前的一段激烈的特许活动时期。我们将新银行与2,047家小型老牌银行的基准样本进行了比较。使用分裂人口持续时间模型,我们估计了两组银行在14年期间长期失败的概率分布,并评估了监管、环境和银行特定条件如何影响该概率分布。我们发现,一家新银行的脆弱性在相当规律的“生命周期”模式下随着时间的推移而变化,但这种基本生命周期模式相对于商业周期的定位也很重要。平均而言,新银行最初破产的可能性低于老牌银行;大约四年后,它们比老牌银行更有可能倒闭;随着时间的推移和新银行的成熟,它们的倒闭率与老牌银行相似。但就在银行业衰退之前,特许银行的失败率最高,它们估计的风险函数遵循一个极端的生命周期形状。限制收购新银行的州法律与新银行破产率较高有关,但容易进入的特许政策与此无关。我们发现,与老牌银行相比,新成立的银行倒闭对资本水平更为敏感,这一证据证明了最近对新成立的银行提高最低资本要求是合理的。最后,我们的研究结果表明,新兴银行的早期预警信号可能比成熟银行更容易识别,这可能是因为处于生命周期早期阶段的银行异质性较小,因此比成熟银行更容易建模。
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