University of Illinois Urbana-Champaign

Two essays on depository institution deregulation

Barger, Peter Stewart

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Description

Title
Two essays on depository institution deregulation
Author(s)
Barger, Peter Stewart
Issue Date
1989
Doctoral Committee Chair(s)
Arnould, Richard J.
Department of Study
Economics
Discipline
Economics
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
Economics, Finance
Language
eng
Abstract
  • The first essay develops two sets of linear models of a depository institution under various competitive assumptions about deposit and loan markets. To evade an explicit interest rate ceiling, intermediaries pay implicit interest on deposits. The models show that the total rate under ceilings will be greater (less) than the explicit rate paid without ceilings when depositors value implicit interest more (less) than the same level of explicit interest at each deposit level. The models also show that a small simultaneous increase in the ceiling rate and competition will raise optimal profits when depositors heavily favor explicit interest.
  • The second essay develops an intermediary capital asset pricing model which recognizes both imperfect markets and imperfect competition for the depository institution industry. Comparative statics of the valuation statement show that the market value of a depository institution is dependent on the capital structure of competing intermediaries, through the competitors' deposit rates.
  • The second part of the second essay is a switching regression analysis stock savings and loan associations. The switch dates are set endogenously and do not occur close to either of the deregulation acts passed during the 1978-1984 period. The results seem to indicate that S&Ls' risk and return characteristics were affected by the Penn Square crisis.
Type of Resource
text
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http://hdl.handle.net/2142/23271
Copyright and License Information
Copyright 1989 Barger, Peter Stewart

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