Browsing by Author "Torres, Jose Humberto"

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    Are Depositors Passive or Active? Evidence from SEC Filing Information Acquisition by Bank Depositors
    (2025-04-24) Torres, Jose Humberto; Balakrishnan, Karthik
    This paper investigates how depositors acquire information, focusing on whether they actively use SEC filings to monitor banks. While the literature on depositor discipline often assumes such behavior, direct evidence remains limited. This study addresses this gap by leveraging EDGAR log files and the ARIN database to track depositor searches, distinguishing them from other market participants, and identifying uninsured depositors based on IP address location. The findings reveal a significant positive correlation between uninsured deposits and SEC search activity, particularly for timely and frequent filings such as Form 8-K and Form 10-Q. This behavior is pronounced in banks with lower performance (measured by ROE), higher risk-taking (indicated by NPLand Z-score), and a greater proportion of long-term time deposits. This study examines behavior around bank failure events to further corroborate active depositor monitoring. Uninsured depositors intensify their information acquisition efforts before a failure, with a notable decrease afterward, supporting the notion of proactive monitoring. In contrast, insured depositors exhibit increased search activity post-failure. Additionally, depositor monitoring appears to moderate regulatory leniency. This study contributes to the literature on depositor discipline, information acquisition, and bank financial distress dynamics, particularly in the context of uninsured depositor monitoring.