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Considering Bank Age and Performance for De Novo Status

Author

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  • Stephen Jones
  • Forest Myers
  • Jim Wilkinson

Abstract

Stephen Jones, Forest Myers, and Jim Wilkinson evaluate the appropriate length of the enhanced supervisory period by analyzing de novo bank financial performance over time. They find that the typical de novo bank’s financial performance differs substantially from that of established banks during their first three years; by the end of three years, the financial performance of de novo banks more closely resembles older and more mature banks. Their results suggest that the three-year enhanced supervisory period is likely appropriate for mitigating risk without excessively burdening new banks.

Suggested Citation

  • Stephen Jones & Forest Myers & Jim Wilkinson, 2022. "Considering Bank Age and Performance for De Novo Status," Economic Review, Federal Reserve Bank of Kansas City, vol. 107(no.2), June.
    • Handle: RePEc:fip:fedker:94351
    DOI: 10.18651/ER/v107n2JonesMyersWilkinson
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    References listed on IDEAS

    as
    1. William B. English & William R. Nelson, 1998. "Profits and balance sheet developments at U.S. commercial banks in 1997," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), vol. 84(Jun), pages 391-419, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Banks and banking; Bank supervision; De novo banks;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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