Why did thrift goodwill matter in 1989?
By: Sangkyun Park.
Contributors: Federal Reserve Bank of New York.
Series: Staff reports ;; no. 51; Staff reports (Federal Reserve Bank of New York : Online) ;; no. 51.
Publisher: Federal Reserve Bank of New York
Published: 1998
Place of publication: [New York, N.Y.]
Language: eng
Format: Electronic resource
Subjects: Savings and loan associations -- Law and legislation -- United States.; Bank capital -- Law and legislation -- United States; Bank investments -- Law and legislation -- United States.
Description: "The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 limits thrift goodwill that can be counted as regulatory capital.  This paper examines if and why the goodwill clause adversely affected the market value of thrifts.  The main findings are that goodwill had a large negative effect on the stock returns of low-capital thrifts in 1989 and that the negative effect persisted in the following two years.  These findings suggest that a reduced put option value accounted for a large portion of the stock-price decline.  The role of asymmetric information appears to have been small"--Federal Reserve Bank of New York web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 2/3/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.