Alligators in the swamp: the impact of derivatives on the financial performance of depository institutions.(includes four-page comment on the ... from: Journal of Money, Credit & Banking
Book Details
PublisherOhio State University Press
ISBN / ASINB00096LSFQ
ISBN-13978B00096LSF9
AvailabilityAvailable for download now
Sales Rank11,413,278
MarketplaceUnited States 🇺🇸
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This digital document is an article from Journal of Money, Credit & Banking, published by Ohio State University Press on August 1, 1996. The length of the article is 7545 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.
From the author: It has been argued that underpriced federal deposit insurance provides incentive for insured institutions to increase the value of shareholder equity by expanding into activities that shift risk onto the deposit insurer. Derivative instruments have been used by firms to change their risk exposure. Permitting firms with substantial moral hazard incentives to utilize interest-rate derivative instruments could lead to higher rather than lower exposure to risk. This article, using a sample of savings and loan associations (S&Ls), examines the proposition that involvement with interest-rate derivatives instruments increases depository institutions, risk. We find that there is a negative correlation between risk and derivatives usage. In addition, S&Ls that used derivatives experienced relatively greater growth in their fixed-rate mortgage portfolios.
From the supplier: It has been argued that underpriced federal deposit insurance provides incentive for insured institutions to increase the value of shareholder equity by expanding into activities that shift risk onto the deposit insurer. Derivative instruments have been used by firms to change their risk exposure. Permitting firms with substantial moral hazard incentives to utilize interest-rate derivative instruments could lead to higher rather than lower exposure to risk. This article, using a sample of savings and loan associations (S&Ls), examines the proposition that involvement with interest-rate derivatives instruments increases depository institutions' risk. We find that there is a negative correlation between risk and derivatives usage. In addition, S&Ls that used derivatives experienced relatively greater growth in their fixed-rate mortgage portfolios. (Reprinted by permission of the publisher.)
Citation Details
Title: Alligators in the swamp: the impact of derivatives on the financial performance of depository institutions.(includes four-page comment on the article)
Author: Elijah, III Brewer
Publication:Journal of Money, Credit & Banking (Refereed)
Date: August 1, 1996
Publisher: Ohio State University Press
Volume: v28 Issue: n3 Page: p482(20)
Distributed by Thomson Gale
From the author: It has been argued that underpriced federal deposit insurance provides incentive for insured institutions to increase the value of shareholder equity by expanding into activities that shift risk onto the deposit insurer. Derivative instruments have been used by firms to change their risk exposure. Permitting firms with substantial moral hazard incentives to utilize interest-rate derivative instruments could lead to higher rather than lower exposure to risk. This article, using a sample of savings and loan associations (S&Ls), examines the proposition that involvement with interest-rate derivatives instruments increases depository institutions, risk. We find that there is a negative correlation between risk and derivatives usage. In addition, S&Ls that used derivatives experienced relatively greater growth in their fixed-rate mortgage portfolios.
From the supplier: It has been argued that underpriced federal deposit insurance provides incentive for insured institutions to increase the value of shareholder equity by expanding into activities that shift risk onto the deposit insurer. Derivative instruments have been used by firms to change their risk exposure. Permitting firms with substantial moral hazard incentives to utilize interest-rate derivative instruments could lead to higher rather than lower exposure to risk. This article, using a sample of savings and loan associations (S&Ls), examines the proposition that involvement with interest-rate derivatives instruments increases depository institutions' risk. We find that there is a negative correlation between risk and derivatives usage. In addition, S&Ls that used derivatives experienced relatively greater growth in their fixed-rate mortgage portfolios. (Reprinted by permission of the publisher.)
Citation Details
Title: Alligators in the swamp: the impact of derivatives on the financial performance of depository institutions.(includes four-page comment on the article)
Author: Elijah, III Brewer
Publication:Journal of Money, Credit & Banking (Refereed)
Date: August 1, 1996
Publisher: Ohio State University Press
Volume: v28 Issue: n3 Page: p482(20)
Distributed by Thomson Gale
