Hellenic Open University Conferences, International Conference on Business & Economics of the Hellenic Open University 2016

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Regulatory enforcement: Discipline on healthy BHC's affiliates
Christos Tsoumas

##manager.scheduler.building##: Titania
##manager.scheduler.room##: Niki
Date: 2016-04-22 03:30 PM – 05:45 PM
Last modified: 2016-05-25

Abstract


This study examines the effect regulatory enforcement actions, imposed on a BHC affiliated commercial bank or the BHC itself, have on the healthy, i.e., non-punished, BHC's commercial bank members of the group. The results suggest that in the pre-crisis period, enforcement actions related to safety and soundness reasons, and to internal control and audit systems of a bank, triggered a disciplinary reaction of BHCs' healthy affiliates. In the post-crisis era however, such a disciplinary mechanism has been severely restricted. Perhaps more interestingly, enforcement actions related to safety and soundness reasons of the BHC itself in the post-crisis era, resulted to a severe reduction of the balance sheet of the healthy bank subsidiaries.

Keywords


Formal enforcement actions; Banks; Event study

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