TY - JOUR
T1 - Bank holding company mergers with nonbank financial firms
T2 - Effects on the risk of failure
AU - Boyd, John H.
AU - Graham, Stanley L.
AU - Hewitt, R. Shawn
PY - 1993/2
Y1 - 1993/2
N2 - An important issue in the debate over whether bank holding companies (BHCs) should be permitted to enter nonbanking activities is the effect of expanded nonbanking powers on BHC risk. We test this issue empirically by simulating mergers between BHCs and firms in nonbanking financial industries, calculating risk measures for the hypothetical merged firms, and comparing their risk characteristics with those of actual unmerged BHCs. We find that mergers of BHCs with life insurance or property/casualty insurance firms may reduce risk, but that mergers of BHCs with securities firms or real estate firms would likely increase risk.
AB - An important issue in the debate over whether bank holding companies (BHCs) should be permitted to enter nonbanking activities is the effect of expanded nonbanking powers on BHC risk. We test this issue empirically by simulating mergers between BHCs and firms in nonbanking financial industries, calculating risk measures for the hypothetical merged firms, and comparing their risk characteristics with those of actual unmerged BHCs. We find that mergers of BHCs with life insurance or property/casualty insurance firms may reduce risk, but that mergers of BHCs with securities firms or real estate firms would likely increase risk.
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U2 - 10.1016/0378-4266(93)90079-S
DO - 10.1016/0378-4266(93)90079-S
M3 - Article
AN - SCOPUS:0002084660
VL - 17
SP - 43
EP - 63
JO - Journal of Banking and Finance
JF - Journal of Banking and Finance
SN - 0378-4266
IS - 1
ER -