Charter Value and Risk-taking: Evidence from Indian Banks

Saibal, Ghosh (2009): Charter Value and Risk-taking: Evidence from Indian Banks. Published in: Journal of the Asia Pacific Economy , Vol. 14, No. 3 (1 August 2009): pp. 270-286.

Abstract

The article examines the determinants of banks’ charter value and its disciplining effect on bank risk-taking since the mid-1990s. The analysis indicates that deposit and loan market concentration exert a significant effect on charter value, suggestive of a strong link between competition and charter value. Among the traditional banking activities, bank size and efficiency are found to be important determinants of charter value. The disciplining effect of charter value is robust across several measures on bank risk.

• Item Type: MPRA Paper
• Language: English
• Keywords: banking; charter value; risk-taking; capital buffer; prudential regulation; India
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages

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