Showing papers by "James R. Barth published in 1995"

Determinants of U.S. commercial bank performance: regulatory and econometric issues

Abstract: The purpose of this paper is to identify important determinants of the performance of commercial banks. Two profitability measures and one measure of loss are used as indicators of performance. Each of these measures is related to different types of bank assets and other variables. The choice of these measures and variables is justified by citing several previous studies in the area. Various arguments are also presented to show that these relationships are not linear, have unknown functional forms, and are not stable. To avoid the risk of misspecifying the functional form of the relationships, a wide class of functional forms is employed that may embody the true functional form as a special case even when the specific functional forms considered in previous studies are false. The empirical results obtained from the class approach are compared with those obtained by assuming linear and specific nonlinear relations to study the robustness of the results to departures from specific functional forms. The effects of excluded variables and of errors in measurement are also accounted for in the class approach.

S&L Closures and Survivors: Are there Systematic Differences in Behavior?

Abstract: During the 1980s, the S&L industry experienced its worst performance since the 1930s. More than a thousand institutions failed and were resolved by regulators from January of 1980 through December of 1992 at an estimated present-value cost of nearly $130 billion. The resolution of additional troubled S&Ls will likely result in a final cost of $150 billion or more. These costs, when measured relative to the size of the industry in the 1980s, are actually greater than those incurred for S&Ls in the Great Depression.

Risk‐Taking in the Texas S&L Industry: Charter and Ownership Effects

Abstract: This paper attempts to identify some of the factors that help explain the losses experienced by S&Ls during the 1980s. Texas institutions are the focus of this study because they account for over half of the total failure costs incurred for the entire industry during the 1980s. Differences in risk-taking behavior by S&Ls according to both charter type and ownership type are examined. The empirical results suggest that deregulation was not the fundamental cause of the industry losses. Instead, the results indicate that the basic behavioral determinants are ownership structure and owner-contributed equity capital.