are regulated, including the need to obtain a charter to operate and explicit and implicit federal guarantees of bank … liabilities to reduce the probability of bank runs. These aspects of banking affect a bankś choice of risk vs. expected return …, which, in turn, affects bank performance. Banks have an incentive to reduce risk to protect the valuable charter from …

Philippines, and Thailand. He applies this technique to the precrisis period 1992-96. Assessing a bank's overall performance … requires assessing both efficiency and risk factors, so Laeven also introduces a measure of risk taking. This risk measure …