Bank Holding Company Mergers with Nonbank Financial Firms: Effects on the Risk of Failure. Boyd, J., H., Graham, S., L., & Hewitt, R., S. Journal of Banking & Finance, 17(1):43-63, 1993.
abstract   bibtex   
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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 title = {Bank Holding Company Mergers with Nonbank Financial Firms: Effects on the Risk of Failure},
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 year = {1993},
 created = {2013-09-19T05:57:07.000Z},
 pages = {43-63},
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 abstract = {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.},
 bibtype = {article},
 author = {Boyd, John H and Graham, Stanley L and Hewitt, R Shawn},
 journal = {Journal of Banking & Finance},
 number = {1}
}

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