NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

The Cross Section of Bank Value

Mark Egan, Stefan Lewellen, Adi Sunderam

NBER Working Paper No. 23291
Issued in March 2017
NBER Program(s):Corporate Finance

We study the determinants of value creation within U.S. commercial banks. We focus on three theoretically-motivated drivers of bank value: screening and monitoring, "safe" deposit production, and synergies between deposit-taking and lending. To assess the relative contributions of each, we develop novel measures of banks' deposit productivity and asset productivity and use these measures to evaluate the cross-section of bank value. We find that variation in deposit productivity explains the majority of variation in bank value, consistent with theories emphasizing safe-asset production. We also find evidence of meaningful value creation from synergies between deposit-taking and lending. Overall, our findings suggest that banks are primarily "special" due to their unique liability structure rather than their ability to screen and monitor borrowers.

download in pdf format
   (587 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w23291

Users who downloaded this paper also downloaded* these:
Bräuning and Ivashina w23316 Monetary Policy and Global Banking
Buchak, Matvos, Piskorski, and Seru w23288 Fintech, Regulatory Arbitrage, and the Rise of Shadow Banks
Jordà, Richter, Schularick, and Taylor w23287 Bank Capital Redux: Solvency, Liquidity, and Crisis
Rampini and Viswanathan w23302 Financial Intermediary Capital
Bernstein, Colonnelli, and Iverson w23305 Asset Allocation in Bankruptcy
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us