USF St. Petersburg campus Faculty Publications
Welfare effects of expanding banking organization opportunities in the securities arena.
Document Type
Article
Publication Date
2002
ISSN
1062-9769
Abstract
This study examines the welfare consequences of expanding, via deregulation, securities activities of banking organizations. The wealth effect of expanding the permissible scale of Bank Holding Company (BHC) securities activities is redistributive: when revenue limits are relaxed, BHCs gain at the expense of investment banks and their customers. However, removing prudential interaffiliate firewalls to permit BHCs to freely pursue synergies from the joint performance of banking and securities activities shows negative wealth effects for BHCs and an increase in their idiosyncratic risk. Relaxing firewalls appears to raise concerns about stockholder and customer exposure to “ethical risk” loss from management conflicts of interest.
Language
en_US
Publisher
Elsevier
Recommended Citation
Narayanan, R.P., Rangan, N.K. & Sundaram, S. (2002). Welfare effects of expanding banking organization opportunities in the securities arena. Quarterly Review of Economics and Finance, 42, 505-527. doi: 10.1016/S1062-9769(01)00130-2
Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.
Comments
Citation only. Full-text article is available through licensed access provided by the publisher. Members of the USF System may access the full-text of the article through the authenticated link provided.