Open Access. Powered by Scholars. Published by Universities.®

Social and Behavioral Sciences Commons

Open Access. Powered by Scholars. Published by Universities.®

Economics

University of Texas Rio Grande Valley

2019

Bank profitability and risk

Articles 1 - 1 of 1

Full-Text Articles in Social and Behavioral Sciences

The Impact Of Financial Regulation Policy Uncertainty On Bank Profits And Risk, Robert N. Killins, David W. Johnk, Peter V. Egly Sep 2019

The Impact Of Financial Regulation Policy Uncertainty On Bank Profits And Risk, Robert N. Killins, David W. Johnk, Peter V. Egly

Economics and Finance Faculty Publications and Presentations

Purpose

The purpose of this paper is to explore the impact of financial regulation policy uncertainty (FRPU) on bank profit and risk.

Design/methodology/approach

This study applies dynamic panel techniques and uses the Baker et al. (2016) FRPU index and macroeconomic variables to assess FRPU’s impact on bank profit and risk using Federal Deposit Insurance Corporation call reports from Q1 2000 to Q4 2016 for over 4,760 commercial banks.

Findings

The effect of FRPU on profitability (Return on Assets [ROA] and Return on Equity [ROE]) and risk (standard deviation of ROA and ROE) produces complex results. FRPU negatively (positively) impacts profits …