Corporate Finance and Financial Institutions

Posted: 4 Nov 2012

See all articles by Mark J. Flannery

Mark J. Flannery

University of Florida - Department of Finance, Insurance and Real Estate

Date Written: October 2012

Abstract

Many corporate finance researchers have avoided analyzing financial institutions, perhaps on the grounds that they are “unique” or “different” from other types of firms. This assessment reflects some unusual features of financial firms' liabilities and a set of governmental regulatory restrictions that have become less pervasive in recent years. In fact, corporate finance theory applies equally well to financial firms, although some modifications are required to recognize the effects of government safety and soundness regulation. Regulated firms' private incentives account for most of the difficulties regulators encounter when trying to craft appropriate oversight mechanisms.

Suggested Citation

Flannery, Mark Jeffrey, Corporate Finance and Financial Institutions (October 2012). Annual Review of Financial Economics, Vol. 4, pp. 233-253, 2012. Available at SSRN: https://ssrn.com/abstract=2170920 or http://dx.doi.org/10.1146/annurev-financial-110311-101721

Mark Jeffrey Flannery (Contact Author)

University of Florida - Department of Finance, Insurance and Real Estate ( email )

P.O. Box 117168
Gainesville, FL 32611
United States
352-392-3184 (Phone)
352-392-0103 (Fax)

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