Valuable bank charters have been hypothesized to provide bank managers self-regulatory incentives to constrain their risk taking. However, this paper presents evidence that charter value itself may derive from high-risk activities, indicating that minimizing risk taking also would limit the...

Recent profitability and recapitalization trends in the banking industry appear to be consistent with a hypothesis advanced by Keeley (1990) termed the quot;charter valuequot; hypothesis. Under this hypothesis banks with greater charter value voluntarily hold higher capital ratios to self-insure...

Recent profitability and recapitalization trends in the banking industry appear to be consistent with a hypothesis advanced by Keeley (1990), Marcus (1984), Demsetz and Strahan (1996), and Demsetz, Saidenberg and Strahan (1996) termed the quot;charter valuequot; hypothesis. Under this hypothesis...