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Derivatives and deregulation: Bank risk in the wake of the Economic Growth, Regulatory Relief, and Consumer Protection Act

Nilsson, Nils Dexter (2024) NEKH03 20232
Department of Economics
Abstract
This project aims to research to which extent the 2018 rollback of the Dodd-Frank Act has affected the derivative trading patterns of medium-sized banks in the U.S. and whether any conclusions can be drawn regarding changes in their risk profiles in regards to derivative markets given the hypothesis that institutions subject to regulation change would increase their risk exposure. To this end, trading data on three derivative categories, Interest Rate, Foreign Exchange and Credit, acquired from financial reports published by the U.S. Federal Financial Institutions Examination Council (FFIEC) has been analyzed through regression models with fixed effects over a time period of 2015-2020. The findings of this report do provide evidence in... (More)
This project aims to research to which extent the 2018 rollback of the Dodd-Frank Act has affected the derivative trading patterns of medium-sized banks in the U.S. and whether any conclusions can be drawn regarding changes in their risk profiles in regards to derivative markets given the hypothesis that institutions subject to regulation change would increase their risk exposure. To this end, trading data on three derivative categories, Interest Rate, Foreign Exchange and Credit, acquired from financial reports published by the U.S. Federal Financial Institutions Examination Council (FFIEC) has been analyzed through regression models with fixed effects over a time period of 2015-2020. The findings of this report do provide evidence in support for the hypothesis and suggest a positive relationship between the EGRRCPA and increased risk for Category IV financial institutions. (Less)
Please use this url to cite or link to this publication:
author
Nilsson, Nils Dexter
supervisor
organization
course
NEKH03 20232
year
type
M2 - Bachelor Degree
subject
keywords
Dodd-Frank, Derivatives, Financial regulations, Banks, Trading, Regression Analysis, Panel Data, Difference-In-Difference Analysis
language
English
id
9147583
date added to LUP
2024-04-16 09:29:50
date last changed
2024-04-16 09:29:50
@misc{9147583,
  abstract     = {{This project aims to research to which extent the 2018 rollback of the Dodd-Frank Act has affected the derivative trading patterns of medium-sized banks in the U.S. and whether any conclusions can be drawn regarding changes in their risk profiles in regards to derivative markets given the hypothesis that institutions subject to regulation change would increase their risk exposure. To this end, trading data on three derivative categories, Interest Rate, Foreign Exchange and Credit, acquired from financial reports published by the U.S. Federal Financial Institutions Examination Council (FFIEC) has been analyzed through regression models with fixed effects over a time period of 2015-2020. The findings of this report do provide evidence in support for the hypothesis and suggest a positive relationship between the EGRRCPA and increased risk for Category IV financial institutions.}},
  author       = {{Nilsson, Nils Dexter}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Derivatives and deregulation: Bank risk in the wake of the Economic Growth, Regulatory Relief, and Consumer Protection Act}},
  year         = {{2024}},
}