Andriosopoulos, K., Chan, K., Dontis-Charitos, P. and Staikouras, S.K. 2017. Wealth and risk implications of the Dodd-Frank Act on the U.S. financial intermediaries. Journal of Financial Stability. 33, pp. 366-379. https://doi.org/10.1016/j.jfs.2016.09.006
| Title | Wealth and risk implications of the Dodd-Frank Act on the U.S. financial intermediaries |
|---|---|
| Type | Journal article |
| Authors | Andriosopoulos, K., Chan, K., Dontis-Charitos, P. and Staikouras, S.K. |
| Abstract | We contribute to the current regulatory debate by examining the wealth and risk effects of the Dodd- Frank Act on U.S. financial institutions. We measure the effects of key legislative events of the Act by means of a multivariate regression model using the seemingly unrelated regression (SUR) framework. Our results indicate a mixed reaction by financial institutions during the various stages of the Act’s legislative process. Further tests reveal that any positive reactions are driven by small and/or low risk institutions, while negative ones are consistent across subsets; except for investment banks. We also find market risk increases for most financial institutions that are dominated by small and/or low risk firms. The cross-section results reveal that large institutions fare better than their smaller counterparts and that large investment banks gain value at the expense of others. Overall, the Dodd-Frank Act may have redistributed value among financial institutions, while not necessarily reducing the industry’s riskiness. |
| Keywords | Banks, Financial institutions, Dodd-Frank Act, Event study, SUR |
| Journal | Journal of Financial Stability |
| Journal citation | 33, pp. 366-379 |
| ISSN | 1572-3089 |
| Year | 2017 |
| Publisher | Elsevier |
| Accepted author manuscript | |
| Digital Object Identifier (DOI) | https://doi.org/10.1016/j.jfs.2016.09.006 |
| Publication dates | |
| Published online | 28 Sep 2016 |
| Published | 28 Sep 2016 |
| Published in print | Dec 2017 |
| License | CC BY-NC-ND 4.0 |