Changes in laws and regulations for the financial industry could reshape the structure of the banking industry, especially if the changes allow banks to achieve cost economies. The evidence suggests that large diversified banks have not enjoyed substantial cost advantages over smaller institutions.

This paper distinguishes hedging from speculative derivative usage by U.S. bank holding companies (BHCs). This is accomplished by implementing a multi-step procedure that relates the implied volatility from traded options on these banks, broad components of the Cleveland Fed Financial Stress...

This paper attempts to distinguish hedging versus speculative derivative usage by U.S. bank holding companies, and whether that has implications for future performance. This is accomplished by implementing a multi-step procedure that relates the implied volatility from traded options on these...