This paper examines insider transfer trading of banking companies before and after their listing on the Taiwan Stock Exchange. During the pre-listing period, we uncover significantly negative abnormal returns after insiders announce their plans to transfer stocks, as well as significant price reversals following the subsequent disclosure of unfulfilled transfers. However, after listing, we observe little market response to the initial announcement, and nor is any price revision observed for partial/no transfer information. For both periods, the substantial increases in turnover provide further evidence on the flow of information from insider trading. Additionally, the propensity and profitability of insider transfers are documented. Overall, empirical results indicate that dissemination of information on insider transfer trading before listing can negatively influence the stock price, while information on insider transfers posted after listing attracts only limited attention. Consequently, the evidence is consistent with the implications associated with the managerial timing of listing decisions.

The paper aims to study the pricing issue of deposit insurance with explicit consideration of bankruptcy costs and closure policies. Full coverage from deposit insurance is imposed by many regulators to stabilize the banking system in the current financial crisis, despite of the potential moral hazard problems. We argue that bankruptcy cost is an important factor in pricing deposit insurance, especially when the insured institution is insolvent. Applying the isomorphic relationship between deposit insurance and put option, we first derive a closed-form solution for the pricing model with bankruptcy costs and closure policies. Then, we modify the barrier option approach to price the deposit insurance in which the bankruptcy cost is set as a function of asset return volatility and more realistic closure policies considering possible forbearance can be accounted for. The properties of the models are supported by numerical simulations and are consistent with the risk-based pricing scheme.