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Table 4: Empirical Results across Different CAMEL-based Classifications 1/ 2/
Variable Name Lags 3/ Benchmark
(1)
Good Banks
(always 1 or 2)
(2)
Bad Banks
(if ever 3, 4 or 5)
(3)
Very Bad Banks
(if ever 4 or 5)
(4)
Uninsured Deposits
(% of total deposits)
15.474
(13.508)
15.161
(13.452)
16.185
(13.608)
16.676
(13.974)
UninsDep L1D 0.382***
(0.064)
0.349***
(0.074)
0.376***
(0.093)
0.426***
(0.111)
L2D 0.025
(0.036)
0.028
(0.045)
0.005
(0.040)
-0.065
(0.070)
L3D -0.002
(0.030)
-0.027
(0.040)
0.036
(0.028)
0.041
(0.058)
UninsIntMarg D 0.880*
(0.497)
1.292*
(0.746)
0.162
(0.205)
0.698
(0.680)
Size D 9.721***
(2.340)
8.549***
(3.251)
10.581***
(2.849)
13.066***
(4.022)
Loans & Leases L1D 0.038*
(0.021)
0.067**
(0.030)
-0.008
(0.034)
-0.043
(0.054)
ResidLoans L1D 0.061**
(0.031)
0.039
(0.039)
0.093*
(0.050)
0.195*
(0.106)
Equity L1D 0.445***
(0.133)
0.439**
(0.180)
0.386***
(0.126)
0.626***
(0.205)
NonCLoans L1D -0.046
(0.040)
-0.094
(0.061)
-0.038
(0.052)
-0.014
(0.069)
GDP D 0.245***
(0.047)
0.257***
(0.059)
0.205***
(0.061)
0.132
(0.128)
L1D 0.090*
(0.049)
0.141**
(0.061)
-0.051
(0.069)
-0.145
(0.164)
Infl D 0.599***
(0.187)
0.908***
(0.245)
0.140
(0.217)
-0.352
(0.555)
Treas_1 D -0.474***
(0.146)
-0.716***
(0.200)
0.031
(0.107)
0.283
(0.313)
Cons -0.048
(0.124)
0.004
(0.174)
-0.010
(0.128)
-0.083
(0.209)
Observations 12826 8912 3914 1380
Banks 1863 1307 556 207
Test of no AR(1) 4/ 0.000 0.000 0.000 0.007
Test of no AR(2) 4/ 0.597 0.838 0.456 0.340
Sargan test 5/ 0.146 0.032 0.095 0.318

1/ Model with endogenous price mechanism.
2/ Coefficients from first-step robust estimations, unless specified otherwise.
3/ LiD = in first difference with i lag(s); and D = in first difference.
4/ AB(i) is the Arellano and Bond test of no autocorrelation of degree i.
5/ Sargan test is based on two-step regression results.

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