Package Bidding in Thrift Resolutions

J. OF FINANCIAL SERVICES RESEARCH, Vol. 11 No. 3, Summer 1997

Posted: 14 Apr 1998

See all articles by Donald R. Fraser

Donald R. Fraser

Texas A&M University - Department of Finance

Hao Zhang

University of Macau - Faculty of Business Administration

Abstract

Package Bidding is a practice by which a package of two or more items is sold off. We evaluate the practice of Package Bidding that was used to resolve the large number of failed thrifts in 1988. Our results, based on a data set from the "Class of 1988" that includes details of the bidding process, suggest that Package Bidding produces a reduction in resolution costs to the government insuring agency. Package Bidding also appears to produce more qualified bidders. These results suggest that policy makers should consider packaging failed depository institutions as a resolution option in dealing with future failures.

JEL Classification: G21, G28

Suggested Citation

Fraser, Donald R. and Zhang, Hao, Package Bidding in Thrift Resolutions. J. OF FINANCIAL SERVICES RESEARCH, Vol. 11 No. 3, Summer 1997, Available at SSRN: https://ssrn.com/abstract=7625

Donald R. Fraser

Texas A&M University - Department of Finance ( email )

430 Wehner
College Station, TX 77843-4218
United States
979-845- 2020 (Phone)

Hao Zhang (Contact Author)

University of Macau - Faculty of Business Administration ( email )

Macau

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