Journal article 455 views 46 downloads
Auctions of failed banks: an analysis of losing bidders
Review of Quantitative Finance and Accounting, Volume: 61
Swansea University Author:
Tim Zhou
-
PDF | Version of Record
Distributed under the terms of a Creative Commons Attribution 4.0 License.
Download (749.1KB)
DOI (Published version): 10.1007/s11156-023-01146-3
Abstract
Between 2007 and 2013, the Federal Deposit Insurance Corporation (FDIC) used purchase and assumption (P&A) as a resolution method to auction 492 failed institutions to healthy banks. While existing studies reveal positive value effects on winning bidders of these auctions, this study finds that...
Published in: | Review of Quantitative Finance and Accounting |
---|---|
ISSN: | 1573-7179 |
Published: |
Springer Nature
|
Online Access: |
Check full text
|
URI: | https://cronfa.swan.ac.uk/Record/cronfa62940 |
Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
first_indexed |
2023-03-22T11:43:53Z |
---|---|
last_indexed |
2023-04-15T03:22:21Z |
id |
cronfa62940 |
recordtype |
SURis |
fullrecord |
<?xml version="1.0" encoding="utf-8"?><rfc1807 xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xmlns:xsd="http://www.w3.org/2001/XMLSchema"><bib-version>v2</bib-version><id>62940</id><entry>2023-03-16</entry><title>Auctions of failed banks: an analysis of losing bidders</title><swanseaauthors><author><sid>c132216bf49e0544a968bb3919686327</sid><ORCID>0000-0002-0830-2316</ORCID><firstname>Tim</firstname><surname>Zhou</surname><name>Tim Zhou</name><active>true</active><ethesisStudent>false</ethesisStudent></author></swanseaauthors><date>2023-03-16</date><deptcode>BAF</deptcode><abstract>Between 2007 and 2013, the Federal Deposit Insurance Corporation (FDIC) used purchase and assumption (P&A) as a resolution method to auction 492 failed institutions to healthy banks. While existing studies reveal positive value effects on winning bidders of these auctions, this study finds that losing bidders experience negative abnormal stock returns. Furthermore, the losing bidders’ stockholders react negatively to a worsening market condition and an increased probability of failure. The returns, nevertheless, are related to the market power gains and distorted competitive condition post-auction. These results raise concerns that this type of intervention potentially gives rise to anticompetitive behavior among participating banks of FDIC auctions.</abstract><type>Journal Article</type><journal>Review of Quantitative Finance and Accounting</journal><volume>61</volume><journalNumber/><paginationStart/><paginationEnd/><publisher>Springer Nature</publisher><placeOfPublication/><isbnPrint/><isbnElectronic/><issnPrint/><issnElectronic>1573-7179</issnElectronic><keywords>FDIC, Banks, Resolution, Auction</keywords><publishedDay>0</publishedDay><publishedMonth>0</publishedMonth><publishedYear>0</publishedYear><publishedDate>0001-01-01</publishedDate><doi>10.1007/s11156-023-01146-3</doi><url/><notes/><college>COLLEGE NANME</college><department>Accounting and Finance</department><CollegeCode>COLLEGE CODE</CollegeCode><DepartmentCode>BAF</DepartmentCode><institution>Swansea University</institution><apcterm>SU Library paid the OA fee (TA Institutional Deal)</apcterm><funders>Swansea University</funders><projectreference/><lastEdited>2023-07-11T15:06:04.0105619</lastEdited><Created>2023-03-16T12:56:14.6364155</Created><path><level id="1">Faculty of Humanities and Social Sciences</level><level id="2">School of Management - Accounting and Finance</level></path><authors><author><firstname>Tim</firstname><surname>Zhou</surname><orcid>0000-0002-0830-2316</orcid><order>1</order></author></authors><documents><document><filename>62940__27036__64a845b7fdf44fc489d60cef7740e06a.pdf</filename><originalFilename>62940.VOR.pdf</originalFilename><uploaded>2023-04-13T14:54:42.3001858</uploaded><type>Output</type><contentLength>767078</contentLength><contentType>application/pdf</contentType><version>Version of Record</version><cronfaStatus>true</cronfaStatus><documentNotes>Distributed under the terms of a Creative Commons Attribution 4.0 License.</documentNotes><copyrightCorrect>true</copyrightCorrect><language>eng</language><licence>https://creativecommons.org/licenses/by/4.0/</licence></document></documents><OutputDurs/></rfc1807> |
spelling |
v2 62940 2023-03-16 Auctions of failed banks: an analysis of losing bidders c132216bf49e0544a968bb3919686327 0000-0002-0830-2316 Tim Zhou Tim Zhou true false 2023-03-16 BAF Between 2007 and 2013, the Federal Deposit Insurance Corporation (FDIC) used purchase and assumption (P&A) as a resolution method to auction 492 failed institutions to healthy banks. While existing studies reveal positive value effects on winning bidders of these auctions, this study finds that losing bidders experience negative abnormal stock returns. Furthermore, the losing bidders’ stockholders react negatively to a worsening market condition and an increased probability of failure. The returns, nevertheless, are related to the market power gains and distorted competitive condition post-auction. These results raise concerns that this type of intervention potentially gives rise to anticompetitive behavior among participating banks of FDIC auctions. Journal Article Review of Quantitative Finance and Accounting 61 Springer Nature 1573-7179 FDIC, Banks, Resolution, Auction 0 0 0 0001-01-01 10.1007/s11156-023-01146-3 COLLEGE NANME Accounting and Finance COLLEGE CODE BAF Swansea University SU Library paid the OA fee (TA Institutional Deal) Swansea University 2023-07-11T15:06:04.0105619 2023-03-16T12:56:14.6364155 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Tim Zhou 0000-0002-0830-2316 1 62940__27036__64a845b7fdf44fc489d60cef7740e06a.pdf 62940.VOR.pdf 2023-04-13T14:54:42.3001858 Output 767078 application/pdf Version of Record true Distributed under the terms of a Creative Commons Attribution 4.0 License. true eng https://creativecommons.org/licenses/by/4.0/ |
title |
Auctions of failed banks: an analysis of losing bidders |
spellingShingle |
Auctions of failed banks: an analysis of losing bidders Tim Zhou |
title_short |
Auctions of failed banks: an analysis of losing bidders |
title_full |
Auctions of failed banks: an analysis of losing bidders |
title_fullStr |
Auctions of failed banks: an analysis of losing bidders |
title_full_unstemmed |
Auctions of failed banks: an analysis of losing bidders |
title_sort |
Auctions of failed banks: an analysis of losing bidders |
author_id_str_mv |
c132216bf49e0544a968bb3919686327 |
author_id_fullname_str_mv |
c132216bf49e0544a968bb3919686327_***_Tim Zhou |
author |
Tim Zhou |
author2 |
Tim Zhou |
format |
Journal article |
container_title |
Review of Quantitative Finance and Accounting |
container_volume |
61 |
institution |
Swansea University |
issn |
1573-7179 |
doi_str_mv |
10.1007/s11156-023-01146-3 |
publisher |
Springer Nature |
college_str |
Faculty of Humanities and Social Sciences |
hierarchytype |
|
hierarchy_top_id |
facultyofhumanitiesandsocialsciences |
hierarchy_top_title |
Faculty of Humanities and Social Sciences |
hierarchy_parent_id |
facultyofhumanitiesandsocialsciences |
hierarchy_parent_title |
Faculty of Humanities and Social Sciences |
department_str |
School of Management - Accounting and Finance{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management - Accounting and Finance |
document_store_str |
1 |
active_str |
0 |
description |
Between 2007 and 2013, the Federal Deposit Insurance Corporation (FDIC) used purchase and assumption (P&A) as a resolution method to auction 492 failed institutions to healthy banks. While existing studies reveal positive value effects on winning bidders of these auctions, this study finds that losing bidders experience negative abnormal stock returns. Furthermore, the losing bidders’ stockholders react negatively to a worsening market condition and an increased probability of failure. The returns, nevertheless, are related to the market power gains and distorted competitive condition post-auction. These results raise concerns that this type of intervention potentially gives rise to anticompetitive behavior among participating banks of FDIC auctions. |
published_date |
0001-01-01T15:06:00Z |
_version_ |
1771133322089463808 |
score |
11.021648 |