Asset quality and scale economies in banking

Article Abstract:

The effects of non-performing loans on bank costs are studied. Results show that poor loans will increase overall bank costs although not substantially. Loan quality also affects the translog cost function and estimates of scale economies. This implies that scale economies could exist for banks with assets worth $50 billion while banks with poor quality loans can reduce their average cost through expansion.

Economic aspects, Bank loans

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Market discipline prior to bank failure

Article Abstract:

This paper investigates the market discipline prior to bank failure and finds that market discipline is strong, and less efficient holding companies pay larger bond spreads before bank failure of its subsidiaries. Thus, these indications can serve as useful warnings to bank supervisors.

United States, Statistical Data Included, Prices and rates, Forecasts and trends, Bonds, Bonds (Securities), Bank failures

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The risk effects of combining banking, securities, and insurance activities

Article Abstract:

Research is presented concerning the modeling of universal banks to determine the risk management of insurance and securities activities. Systemic risk and the unit price of risk are discussed.

Asset & Risk Management, Research, Models, Management, Risk management, Universal banks

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