Table 7: Ordered Logistic Regressions, 19881992 (1-Quarter Lag)

This table presents ordered logistic regression results for a sample of 1,295 new bank holding company inspections. The ordering is BOPEC downgrades, no change in ratings, and BOPEC upgrades. All independent variables are defined in table 5. A single, double, or triple "*" indiciates significance at the 10%, 5%, or 1% level, respectively.

 

Specification

 

Anticipated Sign

1

2

3

Independent Variable

 

Coefficient

t-statistic

Coefficient

t-statistic

Coefficent

t-statistic

Intercept 1

5.3236

4.92***

5.9482

5.86***

5.3705

4.21***

Intercept 2

0.33

0.31

1.3123

1.31

0.50

0.39

Size of Institution

LN_ASSET

0.2795

4.31***

0.2067

3.69***

0.3909

5.154***

Past Supervisory Variables

BOPEC-1

+

11.84

14.46***

7.62

13.01***

13.17

15.28***

BOPEC-2

+

9.36

13.01***

6.16

11.45***

10.42

13.90***

BOPEC-3

+

5.76

6.28***

3.60

7.46***

6.56

10.28***

BOPEC-4

+

2.78

4.92***

1.92

4.03***

3.32

5.81***

PROB_BK

+

2.13

8.72***

2.28

10.55***

2.11

8.33***

INSP_AGE

+

0.3x10-3

0.95

0.5x10-3

1.55

0.5x10-3

1.60

Financial Accounting Variables

EQ_ASSET

0.3311

6.22***

 

0.3239

6.01***

PD90_ASSET

+

0.48

2.23**

0.47

2.06**

NA_ASSET

+

0.92

9.08***

0.87

8.41***

LLR_ASSET

0.4303

2.52**

0.2332

1.33

LPROV_ASSET

 

1.13

4.33***

0.97

3.68***

CHARG_ASSET

0.5653

2.25**

0.7182

2.86***

ROA

 

0.8482

5.57***

0.7354

4.83***

LIQ_ASSET

0.0336

1.58

0.0237

1.12

TD100_ASSET

+

0.03

2.08**

0.02

1.83*

Financial Market Variables

COVAR_PRICE

+

 

0.09

5.54***

0.07

3.43***

EX_RETURN

2.9922

8.78***

1.611

3.91***

STD_RETURN

+

19.88

4.85***

2.44

0.49

MKT_BK

0.071

1.35

0.1999

4.20***

TURNOVER

+

0.02

3.77***

0.02

2.73***

 

AIC

 

1,347.45

 

1,649.88

 

1,304.16

Rescaled R2

0.58

0.39

0.60

c2 (relative to spec. 1)

53.28***

   

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