Size and support ratings of US banks

Tigran Poghosyan; Charlotte Werger; Jakob de Haan

doi:10.1016/j.najef.2016.05.006

Size and support ratings of US banks

Tigran Poghosyan^*, Charlotte Werger, Jakob de Haan

^*Corresponding author for this work

Global Economics & Management

Research output: Contribution to journal › Article › Academic › peer-review

6 Citations (Scopus)

Abstract

We examine whether Fitch support ratings of US banks depend on bank size. Using quarterly data for the period 2004:Q4 to 2012:Q4 and controlling for several factors that make large and small banks different, we find that bank size is positively related to support ratings. However, the effect is non-linear in line with the 'too-big-to-rescue' hypothesis. After the failure of Lehman Brothers and the passing of Dodd-Frank the relation between size and potential support has become stronger.

Original language	English
Pages (from-to)	236-247
Number of pages	12
Journal	North American Journal of Economics and Finance
Volume	37
DOIs	https://doi.org/10.1016/j.najef.2016.05.006
Publication status	Published - Jul-2016

Keywords

Support ratings
Bank size
Too-big-too-fail
Too-big-to-rescue
GOVERNMENT SUPPORT
HOLDING COMPANIES
TOO BIG
DIVERSIFICATION
RETURNS
RISK
FAIL

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title = "Size and support ratings of US banks",

abstract = "We examine whether Fitch support ratings of US banks depend on bank size. Using quarterly data for the period 2004:Q4 to 2012:Q4 and controlling for several factors that make large and small banks different, we find that bank size is positively related to support ratings. However, the effect is non-linear in line with the 'too-big-to-rescue' hypothesis. After the failure of Lehman Brothers and the passing of Dodd-Frank the relation between size and potential support has become stronger.",

keywords = "Support ratings, Bank size, Too-big-too-fail, Too-big-to-rescue, GOVERNMENT SUPPORT, HOLDING COMPANIES, TOO BIG, DIVERSIFICATION, RETURNS, RISK, FAIL",

author = "Tigran Poghosyan and Charlotte Werger and {de Haan}, Jakob",

year = "2016",

month = jul,

doi = "10.1016/j.najef.2016.05.006",

language = "English",

volume = "37",

pages = "236--247",

journal = "North American Journal of Economics and Finance",

issn = "1062-9408",

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T1 - Size and support ratings of US banks

AU - Poghosyan, Tigran

AU - Werger, Charlotte

AU - de Haan, Jakob

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AB - We examine whether Fitch support ratings of US banks depend on bank size. Using quarterly data for the period 2004:Q4 to 2012:Q4 and controlling for several factors that make large and small banks different, we find that bank size is positively related to support ratings. However, the effect is non-linear in line with the 'too-big-to-rescue' hypothesis. After the failure of Lehman Brothers and the passing of Dodd-Frank the relation between size and potential support has become stronger.

KW - Support ratings

KW - Bank size

KW - Too-big-too-fail

KW - Too-big-to-rescue

KW - GOVERNMENT SUPPORT

KW - HOLDING COMPANIES

KW - TOO BIG

KW - DIVERSIFICATION

KW - RETURNS

KW - RISK

KW - FAIL

U2 - 10.1016/j.najef.2016.05.006

DO - 10.1016/j.najef.2016.05.006

M3 - Article

SN - 1062-9408

VL - 37

SP - 236

EP - 247

JO - North American Journal of Economics and Finance

JF - North American Journal of Economics and Finance

ER -