Date of Award
Doctor of Business Administration (DBA)
Chair and Committee
Taylor Begley, Asaf Manela, Anjan Thakor,
I examine the effectiveness of off-site bank examinations by using the natural experiment during COVID-19. Exploiting the difference in the amount of soft information and in the effect of the change to off-site examination between the banks far from the supervisory field office and those near the field office, I find that distant banks increase asset risk regarding RWA to asset ratio and become less conservative in anticipating or preparing for future losses from loan portfolios. I also show that distant banks that adjust the loan portfolio to be riskier are less profitable, and the effect is prominent among the less-capitalized banks. My findings suggest that on-site examination plays a vital role in preventing banks from taking more risk in their asset portfolios.
Shin, Whan Kyu, "The Effect of Off-Site Examination: A Natural Experiment After COVID-19" (2022). Olin Business School Electronic Theses and Dissertations. 7.