An event study analysis of too-big-to-fail after the Dodd-Frank act: Who is too big to fail?

Kyle D. Allen, Ken B. Cyree, Matthew D. Whitledge, Drew B. Winters

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

One feature of the Dodd-Frank Act is the elimination of too-big-to-fail (TBTF) banks. TBTF is a government guarantee of large banks that has been shown to increase the value of these banks, so removing the guarantee should result in a price decline of TBTF bank stock. Using event study methods, we find very limited reaction to the process of eliminating TBTF. Specifically, there is limited reaction among the largest banks and banks receiving special attention, such as Systemically Important Financial Institutions (SIFI) banks. Instead, smaller banks not receiving special attention show some evidence of negative returns with the elimination of TBTF.

Original languageEnglish
Pages (from-to)19-31
Number of pages13
JournalJournal of Economics and Business
Volume98
DOIs
StatePublished - Jul 1 2018

Keywords

  • Dodd-Frank act
  • Event study
  • Too-big-to-fail

Fingerprint Dive into the research topics of 'An event study analysis of too-big-to-fail after the Dodd-Frank act: Who is too big to fail?'. Together they form a unique fingerprint.

Cite this