<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>This study investigates whether the ratio of long-term investment to total assets, the ratio of cash on hand to total assets, and the ratio of price-to-earnings are risk indicators for bank failures. Silicon Valley Bank (SVB), Signature Bank, and Silvergate Capital Corp., which experienced bank failure, and banks that are among the 20 largest banks in the USA are analyzed with the panel data method. Analyses were made using quarterly data between 2003Q4 and 2022Q4. It is revealed that the long-term investment to total assets ratio increases the bank failure risk. The risk of bank failure varies negatively with the cash on hand to total assets ratio. Bank failure risk rises as the price-to-earnings ratio rises. In terms of revealing the factors influencing the risk of bank failure and possible consequences, it is expected that the findings obtained could contribute to the literature.</p>
</abstract>

This study investigates whether the ratio of long-term investment to total assets, the ratio of cash on hand to total assets, and the ratio of price-to-earnings are risk indicators for bank failures. Silicon Valley Bank (SVB), Signature Bank, and Silvergate Capital Corp., which experienced bank failure, and banks that are among the 20 largest banks in the USA are analyzed with the panel data method. Analyses were made using quarterly data between 2003Q4 and 2022Q4. It is revealed that the long-term investment to total assets ratio increases the bank failure risk. The risk of bank failure varies negatively with the cash on hand to total assets ratio. Bank failure risk rises as the price-to-earnings ratio rises. In terms of revealing the factors influencing the risk of bank failure and possible consequences, it is expected that the findings obtained could contribute to the literature.

Bank failure risk: A study on Silicon Valley Bank, Signature Bank, and Silvergate Capital Corporations

Aksaray University, Ortakoy Vocational School of Higher Education

Department of Finance, Banking & Insurance

Financial Internet Quarterly

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

This study investigates whether the ratio of long-term investment to total assets, the ratio of cash on hand to total assets, and the ratio of...

Bank failure risk: A study on Silicon Valley Bank, Signature Bank, and Silvergate Capital Corporations

Publicado en línea: 10 jul 2023

Páginas: 36 - 45

Recibido: 28 mar 2023

Aceptado: 30 may 2023

DOI: https://doi.org/10.2478/fiqf-2023-0011

Palabras clave
bank failure, risk, long-term investment, total assets, cash on hand, price to earns ratio

© 2023 Çağri Hamurcu, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Bank failure risk: A study on Silicon Valley Bank, Signature Bank, and Silvergate Capital Corporations

Publicado en línea: 10 jul 2023

Páginas: 36 - 45

Recibido: 28 mar 2023

Aceptado: 30 may 2023

DOI: https://doi.org/10.2478/fiqf-2023-0011

Palabras clavebank failure, risk, long-term investment, total assets, cash on hand, price to earns ratio

© 2023 Çağri Hamurcu, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Palabras clave
bank failure, risk, long-term investment, total assets, cash on hand, price to earns ratio