Observing Enforcement: Evidence from Banking

72 Pages Posted: 4 Feb 2019 Last revised: 2 Oct 2020

See all articles by Anya Kleymenova

Anya Kleymenova

Board of Governors of the Federal Reserve System

Rimmy E. Tomy

University of Chicago

Date Written: October 1, 2020


We find that the public disclosure of regulators' supervisory actions changes their enforcement behavior. Using a novel sample of enforcement actions and orders (EDOs) and the setting of the 1989 Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), which required public disclosure of EDOs, we find that U.S. banking regulators issue more EDOs, intervene sooner, and rely more on publicly observable signals after the disclosure regime change. The content of EDOs also changes, with documents becoming more complex and boilerplate. We show that EDOs disclosure affects regulators' behavior over and above other changes that occurred around FIRREA. Taken together, our results suggest regulators respond to the increased public scrutiny of their actions.

Keywords: Disclosure, Enforcement actions, Regulatory incentives, Banking

JEL Classification: G21, G28

Suggested Citation

Kleymenova, Anya V. and Tomy, Rimmy, Observing Enforcement: Evidence from Banking (October 1, 2020). Chicago Booth Research Paper No. 19-05, Fama-Miller Working Paper, Available at SSRN: https://ssrn.com/abstract=3327502 or http://dx.doi.org/10.2139/ssrn.3327502

Anya V. Kleymenova (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States
202-452-2662 (Phone)

Rimmy Tomy

University of Chicago ( email )

Booth School of Business
5807 S Woodlawn Ave
Chicago, IL 60637
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
PlumX Metrics