Bank holding company risk Público Deposited

Creator Series Issue number
  • 398
Date Created
  • 1988-04
Abstract
  • This study estimates the effects of allowing bank holding companies (BHCs) to enter several lines of financial business not now permitted. A simulation technique is used to estimate the risk and return of hypothetical financial corporations after merger between a BHC and a large firm in each of these industries: securities, real estate, life insurance, property and casualty insurance, and insurance agencies. The study concludes that a merger between a BHC and a life insurance company may decrease the probability of bankruptcy for the merged firm relative to the BHC alone. This result does not hold true, however, for BHC mergers with firms in the other industries. In particular, BHC mergers with securities or real estate firms are found to increase the probability of bankruptcy.

Subject (JEL) Palabra Clave Alternative title
  • The profitability and risk effects of allowing bank holding companies to merge with other financial firms : a simulation study / John H. Boyd, Stanley L. Graham.
Colaboradores Date Modified
  • 03/16/2018
Publisher
  • Federal Reserve Bank of Minneapolis. Research Division.
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