Evidence on the Objectives
of Bank Managers
Joseph P. Hughes
Loretta J. Mester
THE WHARTON FINANCIAL INSTITUTIONS CENTER
The Wharton Financial Institutions Center provides a multi-disciplinary research approach to
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The Working Paper Series is made possible by a generous
grant from the Alfred P. Sloan Foundation
Joseph P. Hughes is at Rutgers University. Loretta J. Mester is at the Federal Reserve Bank of
This paper is a revision of "Accounting for the Demand for Financial Capital and Risk-Taking in Bank Cost
Please address correspondence to Joseph P. Hughes, Department of Economics, Rutgers University, New
Brunswick, NJ 08903, or to Loretta J. Mester, Research Department, Federal Reserve Bank of Philadelphia, Ten
Independence Mall, Philadelphia, PA 19106.
The views expressed here are ours and do not necessarily represent the views of the Federal Reserve Bank of
Philadelphia or the Federal Reserve System.
Evidence on the Objectives of Bank Managers
Revised: January 1994
(Original Draft: December 1992)
Abstract: We present evidence on the objective function of