Reciprocal Deposits and Incremental Bank Risk

CAMA Working Paper No. 22/2012

12 Pages Posted: 4 Jun 2012

Date Written: June 2012


Even after controlling for other observable factors, reciprocal deposits are associated with higher bank risk as measured by the probability of failure and the Zscore. These results are consistent with the moral hazard hypothesis and reject the risk substitution hypothesis.

Keywords: reciprocal deposits, bank risk, logit, failure, z-score

JEL Classification: G21

Suggested Citation

Shaffer, Sherrill, Reciprocal Deposits and Incremental Bank Risk (June 2012). CAMA Working Paper No. 22/2012. Available at SSRN:

Sherrill Shaffer (Contact Author)

University of Wyoming ( email )

P.O. Box 3985
Laramie, WY 82071-3985
United States
307-766-2173 (Phone)
307-766-5090 (Fax)

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