Why Does the FDIC Sue?

Abstract

Cases the Federal Deposit Insurance Corporation (FDIC) pursues against the directors and officers of failed commercial banks for (gross) negligence are important for the corporate governance of U.S. commercial banks. These cases shape the kernel of bank corporate governance, as they guide expectations of bankers and regulators in defining the limits of acceptable behavior under financial distress. We examine the differences in behavior of all 408 U.S. commercial banks that were taken into receivership between 2007-2012. Sued banks had different balance sheet dynamics in the three years prior to failure. These banks were generally larger, faster growing, obtained riskier funding and were more "optimistic". We find evidence that the behavior of bank boards adjusts in an out-of-sample set of banks. Our results suggest the FDIC does not only pursue "deep pockets", but sets corporate governance standards for all banks by suing negligent directors and officers.

Blockchain Empowers Chain Enterprises in the Digital Economy to Strengthen Risk Management Research

“…In the next 2 to 3 years, blockchain technology may undergo large-scale changes in the fields of Internet finance, Internet of ings, and big data. Entrepreneurs must pay attention to ten areas (artificial intelligence, genes, currency, Internet of Everything, new manufacturing, sharing economy, data, nanotechnology, wearable devices, and space exploration) that will develop rapidly in the future, which will play a leading role in future social and economic development [15][16][17]. According to various data analysis and integration, the applicable fields of blockchain are shown in Figure 2.…”