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Banking Conditions

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The run-up in bank share prices has recently abated. This is consistent with concerns over possible over-valuation of bank stocks and reports that bank insiders have been selling stocks for months. Insider sales may indicate that those with superior information about bank prospects anticipate weaker earnings down the road. Once made public, this information would precipitate a drop in prices. If this interpretation is correct, news of insider selling could itself trigger a sell-off and price decline.


Suggested citation: “Banking Conditions,” Federal Reserve Bank of Cleveland, Economic Trends, no. 97-04, pp. 16-17, 04.01.1997.

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