The dynamics of US bank profitability

Chronopoulos, D., Liu, H., McMillan, F. and Wilson, J.O.S. (2014) The dynamics of US bank profitability. European Journal of Finance, 21(5), pp. 426-443. (doi: 10.1080/1351847X.2013.838184)

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Abstract

We examine the determinants of profitability for a large sample of US banks over the period 1984–2010. Specifically, we assess the extent to which short-run profits persist, and whether such persistence is affected by changes in regulation and the recent financial crisis. Our findings suggest that the competitive process reduces positions of abnormal profitability, albeit this is not immediate. There is also evidence that changes in regulation enacted during the 1990s affected both the level and persistence of bank profitability. The financial crisis of 2007–2010 appears to have resulted in an increase in the persistence of bank profitability.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Liu, Professor Frank
Authors: Chronopoulos, D., Liu, H., McMillan, F., and Wilson, J.O.S.
College/School:College of Social Sciences > Adam Smith Business School > Accounting and Finance
Journal Name:European Journal of Finance
Publisher:Routledge
ISSN:1351-847X
ISSN (Online):1466-4364

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