Document Type
Working Paper
Publication Date
1996
College/Unit
Regional Research Institute
Document Number
9630
Department/Program/Center
Regional Research Institute
Abstract
The amount of risk that banks assume in lending is a key consideration in the amount of lending that banks ultimately will do. The relationship between default risk and lending levels is addressed here by deriving risk measures based on local economic industry mixes and locational characteristics of bank groups and then testing the degree to which differences in risk in local lending markets affect the asset allocation decisions of banks. FDIC call report data for West Virginia banks are combined with quarterly sectoral failure rate data and earnings data by sectors for the analysis.
Digital Commons Citation
Sorenson, David J., "Estimating Bank Lending Risk and Its Effect on Asset Allocation" (1996). Regional Research Institute Working Papers. 201.
https://researchrepository.wvu.edu/rri_pubs/201