| The first chapter examines whether monetary policy responsibilities alter the central bank's role as a bank supervisor. The analysis focuses on the U.S., where the FED shares supervisory duties with two other federal agencies, namely the OCC and the FDIC. Among these three institutions, the FED is the only one responsible for monetary policy. Hence, using banks supervised by the FDIC and the OCC as a control group, the FED's supervisory behavior is compared with the other two agencies. The comparison is made using a new panel dataset that includes all insured commercial and savings banks in the U.S., and all formal regulatory actions issued against these institutions during the period 1990:1–1998:IV. The results suggest that the FED's monetary policy duties do alter its role in bank supervision: indicators of monetary policy affect the supervisory actions of the FED, but do not affect the actions of the other two agencies.; For the second chapter, the method of maximum likelihood is used to estimate Carlstrom and Fuerst's (1997) dynamic, stochastic, general equilibrium business cycle model with agency costs. Formal econometric hypothesis tests reveal that the data prefer the Carlstrom-Fuerst model to a standard, real business cycle alternative. Specifically, the key parameters that determine the level of agency costs and distinguish the model from a standard real business cycle model are statistically significant and of relevant size. However, formal hypothesis tests provide evidence of instability in estimates of the model's structural parameters.; The third chapter examines the characteristics of banks that received a formal action during the period 1989:IV–1998:IV. The objective of the analysis is to uncover systematic differences between banks that failed or merged into another institution before their action was terminated, and banks that recovered. The results suggest that at the time of the intervention the condition of failed banks was already such that their probability of surviving was much lower than that of recovered or merged banks. This is true even a year before the formal action, which indicates that problems could have been detected earlier on. |
