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: Suggested Citation