An analysis of the impact of depositor preference laws on the cost of debt capital for banks and on the value of FDIC deposit guarantees. The authors find that depositor preference laws increase the value of uninsured deposit claims and reduce the size of the FDIC subsidy, but will not affect...

An examination of the empirical impact of depositor preference legislation (DPL) on resolution type and resolution costs for commercial banks. It focuses on the impact of state DPL statutes, using FDIC and call-report data on resolution costs and types for all operating FDIC-BIF insured...

An explanation of the relationship between interbank exposure and the too big to fail doctrine, with an examination of the interbank exposure of U.S. banks between March 1984 and March 1990.

An analysis of the issues surrounding bank resolution costs, looking at failures from 1986 to 1992 and including proxies for fraud, off-balance-sheet risk, brokered deposits, and both regional and size effects. Evidence suggests there was a significant lag between the realization and recognition...

A study that models the regulatory decision to close a bank as a call option. A two-equation model of bank failure that treats closings as regulatorily timed events is compared with two single-equation models for accuracy.

A discussion of the hypotheses that high levels of interbank exposure reduce the safety and soundness of the banking system and that interbank exposure affects the ability of the FDIC to use market discipline as a constraint on banks' risk-taking, with comment on Fourth Federal Reserve District...

An examination of the contributions of economic and managerial factors to commercial bank failures in the 1980s.

A critical analysis of the probable effects of national depositor preference--a provision of the Omnibus Budget Reconciliation Act of 1993--showing that although the FDIC may experience some cost savings in the short term, the long-term benefits are likely to be greatly diminished.

A discussion of the fundamental economic principles to consider in evaluating proposals to reform the current system of federal deposit insurance.

A discussion of how the FDIC's policies for handling bank failures can have unintended, and undesirable, effects on the banking system.