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Measuring the performance of banks : theory, practice, evidence, and some policy implications

Hughes, Joseph P.; Mester, Loretta J. - 2013

The unique capital structure of commercial banking - funding production with demandable debt that participates in the economyś payments system - affects various aspects of banking. It shapes banks ́comparative advantage in providing financial products and services to informationally opaque...

Persistent link: https://www.econbiz.de/10009774419

The future of large, internationally active banks : does scale define the winners?

Hughes, Joseph P.; Mester, Loretta J. - 2015

Our research as well as that by other authors has found scale economies at all sizes of banks and the largest scale economies at the largest banks – that is, larger banks are able to provide products at lower average cost than smaller banks. While the earlier literature found that scale...

Persistent link: https://www.econbiz.de/10011416928

The Dollars and Sense of Bank Consolidation

Hughes, Joseph P.; Lang, William; Mester, Loretta J.; … - Financial Institutions Center, Wharton School of Business - 1998

expected profit, the riskiness of profit, profit efficiency, market value, market-value efficiencies, and the risk of … insolvency. Our estimates of expected profit, profit risk, and profit efficiency are based on a structural model of leveraged … Moon (1996). Here, we also estimate two additional measures that gauge efficiency in terms of the market values of assets …

Persistent link: https://www.econbiz.de/10005838120

Measuring the Performance of Banks: Theory, Practice, Evidence, and Some Policy Implications

Hughes, Joseph P.; Mester, Loretta J. - Department of Economics, Rutgers University-New Brunswick - 2013

The unique capital structure of commercial banking – funding production with demandable debt that participates in the economy’s payments system – affects various aspects of banking. It shapes banks’ comparative advantage in providing financial products and services to informationally...

Persistent link: https://www.econbiz.de/10010797421

Managerial Incentives and the Efficiency of Capital Structure in U.S. Commercial Banking

Hughes, Joseph P.; Lang, William W.; Moon, Choon-Geol; … - 2004

We extend the literature on the effects of managerial entrenchment to consider how safety-net subsidies and financial distress costs interact with managerial incentives to influence capital structure in U.S. commercial banking. Using cross-sectional data on publicly traded, highest-level U.S....

Persistent link: https://www.econbiz.de/10010263221

Estimating Managers' Utility Maximizing Demand for Agency Goods

Hughes, Joseph P.; Moon, Choon-Geol - 2003

An empirical model of managers' demand for agency goods is derived and estimated using the Almost Ideal Demand System of Deaton and Muellbauer (AER 1980). As in Jensen and Meckling (JFE 1976), we derive managers' demand for agency goods by maximizing a managerial utility function where managers...

Persistent link: https://www.econbiz.de/10010274320

How bad is a bad loan? Distinguishing inherent credit risk from inefficient lending (does the capital market price this difference?)

Hughes, Joseph P.; Moon, Choon-Geol - 2017

We develop a novel technique to decompose banks' ratio of nonperforming loans to total loans into two components: first, a minimum ratio that represents best-practice lending given the volume and composition of a bank's loans, the average contractual interest rate charged on these loans, and...

Persistent link: https://www.econbiz.de/10012028607

How bad is a bad loan? Distinguishing inherent credit risk from inefficient lending (Does the capital market price this difference?)

Hughes, Joseph P.; Moon, Choon-Geol - 2018

We develop a novel technique to decompose banks' ratio of nonperforming loans to total loans into three components: first, a minimum ratio that represents best-practice lending given the volume and composition of a bank's loans, the average contractual interest rate charged on these loans, and...

Persistent link: https://www.econbiz.de/10012028609

The performance of financial institutions: Modeling, evidence, and some policy implications

Hughes, Joseph P.; Mester, Loretta J. - 2018

The unique capital structure of commercial banking - funding production with demandable debt that participates in the economy's payments system - affects various aspects of banking. It shapes commercial banks' comparative advantage in providing financial products and services to informationally...

Persistent link: https://www.econbiz.de/10012028612

Managerial incentives and the efficiency of capital structure

Hughes, Joseph P.; Lang, William W.; Moon, Choon-Geol; … - 2001

We extend the literature on the effects of managerial entrenchment on capital structure to consider how safety-net subsidies and financial distress costs interact with managerial incentives to influence capital structure in U.S. commercial banking. Using cross-sectional data on publicly traded,...

Persistent link: https://www.econbiz.de/10010318364