Banks that switch charters often wind up suffering financially, according to Indiana University Professor Richard Rosen. Banks that changed charters from 1980 to 1993 did not perform as well as similar banks that retained their charters, the researcher finds.

These banks, Mr. Rosen theorizes, were trying to hide negative information from the government. Switching charters-and thus regulators- meant new examiners unfamiliar with the institution would conduct the reviews.

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