Impact of Ownership Structure and Regulation on the Risk-Taking Behavior of Depository Institutions

Journal of Financial Management and Analysis, Vol. 18, 2005

Posted: 18 Apr 2006

See all articles by M. Kabir Hassan

M. Kabir Hassan

University of New Orleans - College of Business Administration - Department of Economics and Finance

Gordon V. Karels

University of Nebraska at Lincoln - Department of Finance

Stephen Wilcox

Minnesota State University, Mankato

Abstract

This paper presents an analysis of the impact of ownership structure and regulation on the risk-taking behavior of commercial banks and savings and loans. Our work differs from previous efforts in that we measure risk in terms of an institution's asset or business risk, using the Ronn-Verma option-pricing methodology, as well as its equity risk. Our work is also unique in that we have incorporated dummy variables into our empirical model which enables us to test risk-taking differentials between commercial banks and savings and loans, as well as risk-taking differentials between federally and state chartered institutions.

Keywords: Ownership structure, Option-pricing methodology, Equity risk

JEL Classification: G21, G32

Suggested Citation

Hassan, M. Kabir and Karels, Gordon V. and Wilcox, Stephen, Impact of Ownership Structure and Regulation on the Risk-Taking Behavior of Depository Institutions. Journal of Financial Management and Analysis, Vol. 18, 2005, Available at SSRN: https://ssrn.com/abstract=895961

M. Kabir Hassan

University of New Orleans - College of Business Administration - Department of Economics and Finance ( email )

2000 Lakeshore Drive
New Orleans, LA 70148
United States

Gordon V. Karels (Contact Author)

University of Nebraska at Lincoln - Department of Finance ( email )

Lincoln, NE 68588-0490
United States

Stephen Wilcox

Minnesota State University, Mankato ( email )

228 Wiecking Center
Mankato, MN 56001
United States
(507) 389-6531 (Phone)

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