This work investigates and compares the total risk attributable to holding and operating companies, using data from the United States. By proxying overall risk by the option-adjusted spread on corporate bonds, we hypothesize that operating companies face a higher risk. Our data were obtained...

After the 2008 global financial crisis, U.S. bank holding companies needing to cover larger-than-expected loan losses raised concerns that existing provision accounting may be procyclical. Most related studies have found evidence of procyclicality using either aggregate time-series data or...

This study seeks to examine the quality of the remuneration policy (RP) and identify its main determinants within a financial holding company (FHC) - the UniCredit Group. The results show that the quality of remuneration policy in the examined FHC was low. Although the dominant bank is...

Using regulatory data from financial institutions on fraud-related losses in foreign markets, we find large differences in recovery rates across countries. Specifically, losses in countries with poor governance have lower recoveries. Such results are driven by dimensions such as control of...

In Korea, the number of holding companies has increased steadily every year due to government deregulation. Establishing holding companies is a means by which companies attempt to improve corporate governance, especially when opacity is a problem due to circular shareholdings. Recently, however,...

Using panel smooth transition regression framework on a new proxy of business cycle (BC) index and quarterly data of US bank holding companies from 1993Q1 to 2020Q1, our results provide the empirical support to the theory that BC has non-linear effect on liquidity creation. We find a positive...

We develop a dynamic model of a BHC that encompasses both a trading desk and a loan desk, and explore the role of risk attitude and overleveraging by the trading desk. We trace the impact of monetary policy and market innovations on bank behavior in the presence of Basel III type regulations. We...

This work investigates and compares the total risk attributable to holding and operating companies, using data from the United States. By proxying overall risk by the option-adjusted spread on corporate bonds, we hypothesize that operating companies face a higher risk. Our data were obtained...

In 2019, the so-called “Capital Requirements” Directive 2013/36/EU (CRD IV) was amended by virtue of Directive (EU) 2019/878 (CRD V) in respect to several aspects, including the supervision of financial holding companies and mixed financial holding companies. The new rules apply from 1...

After a first attempt failed because of procedural defects, Colombia introduced a special tax rule for some holding companies in late 2019. The system grants qualified companies special tax exemptions, particularly for some dividends received from foreign entities and some capital gains arising...

The new Illinois Bank Holding Company Act permitting the formation of multibank holding companies creates strategic opportunities as well as threats for banks both inside and outside the state. The author analyzes the advantages and disadvantages of three types of expansion strategies that are...

We examine the role of interest rate sensitivity for bank acquisitions. We expect that the interest rate sensitivity of a bank impacts the likelihood that it is acquired as the fair value of fixed rate loans increases (decrease) when interest rates decrease (increase) while book values remain...

Subsidiaries of a firm can use their reporting discretion for several goals, such as reporting earnings comparable to other subsidiaries or reporting earnings that are smooth over time. Prior theoretical work on reporting discretion recognizes the tension among these goals (Holmstrom, 1982; Demski...

Banking supervision and regulation by the Hong Kong Monetary Authority (HKMA) remain strong. This assessment confirms the 2014 Basel Core Principles assessment that the HKMA achieves a high level of compliance with the BCPs. The Basel III framework (and related guidance) and domestic and...

I analyze US multinationals’ (MNCs) use of foreign holding companies in their organizational structures and the impact of holding companies on internal capital markets. The look-thru rule in the Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA) reduces the after-tax cost of...

This publication has been prepared under the Multi-Annual 2015-2019 Programme "The Polish and the EU agricultures 2020+. Challenges, chances, threats, proposals", within the subject "Dilemmas of the development of sustainable agriculture in Poland", which involves three research tasks, as...

Compliance measures emphasized in the Dodd-Frank Bill 2010, Section 165 is a response to the 2008 financial crisis, that requires large banks to maintain a minimum capital ratio. The Federal Reserve Bank (Fed) regulates capital of Bank Holding Companies (BHC) through compliance Supervisory...

Bank-owned life insurance (BOLI) is life insurance purchased by bank holding companies (BHCs) for key employees, whose proceeds can be shared by the company and employees' heirs. We investigate whether and how executive compensation affects BOLI and whether BOLI use affects BHC performance....

Recent regulatory proposals tie a financial institution's systemic importance to its complexity. However, little is known about how complexity affects banks' risk management. Using the 1996-1999 deregulations of U.S. banks' nonbanking activities as a natural experiment, we show that banks'...

Background: Most Bank holding companies (BHCs) sustains significant losses and increased risk exposure which caused them to become insolvent. BHCs that become insolvent have a negative impact on the U.S. economy. There is a lack of effective practice towards capital regulation that causes BHC to...

Compliance measures emphasized in the Dodd-Frank Bill 2010, Section 165 is a response to the 2008 financial crisis, that requires large banks to maintain a minimum capital ratio. The Federal Reserve Bank (Fed) regulates capital of Bank Holding Companies (BHC) through compliance Supervisory...

We investigate the risk-taking behaviour of Bank Holding Companies (BHCs) that are subject to the Dodd–Frank Act (DFA). Specifically, we employ a difference-in-differences method to assess the effectiveness of the DFA in reducing the riskiness of complex banks and their contribution to...

We develop metrics to assess the complexity of a bank holding company (BHC), based on its ownership structure. Large BHCs have intricate ownership hierarchies involving hundreds or even thousands of legal entities that may contribute to increased operational risk and greater opacity. Our...

Berkshire Hathaway has realized a Sharpe ratio of 0.79 with significant alpha to traditional risk factors. However, the alpha becomes insignificant when controlling for exposures to Betting-Against-Beta and Quality-Minus-Junk factors. Further, we estimate that Buffett's leverage is about...

We show a dark-side view of internal capital markets in which one segment exploits the funding advantage of another profitable segment to relax its financial constraints. Results demonstrate that bank holding companies (BHCs) shield their nonbank segments, and not their bank segments, from...

A company is a juristic person, separate from its shareholders. Its property is not the property of its shareholders (though it is running the business of shareholders) ; its debts are not the debts of its members; and has perpetual succession. From the date and time of registration of its...

In this paper, we investigate the role played by the organizational structure of bank holding companies in the earnings management of bank subsidiaries. Our results suggest that bank holding companies manage their subsidiaries to optimize the reporting outcome at the consolidated level. We find...

The Tenant Fees Act 2019 aims to stop landlords and letting agents in England from taking advantage of prospective tenants who pay holding deposits. It caps the maximum holding deposits that can be taken to one week's rent. A holding deposit, as the Act's sponsor Lord Bourne confirmed, creates...

Corporate Governance is basically concerned with ways in which all parties interested in the well-being of the firm (the stakeholders) attempt to ensure that managers and other insiders are always taking appropriate measures and adopting mechanisms that safeguard the interests of the...

This study examines seven basic theories of dividend policies in bank holding companies during the worst recession since The Great Depression. Data is obtained from Uniform Bank Performance Reports for 2008 where large losses were reported for the US banks. Previous studies found that the...

"When the scale and scope of influence that a corporation wields is so great that it eclipses that of nearly all other corporations combined, it attains megacorporate status. This book proposes that, from amongst the current big tech cohort, it is only Google's owner, Alphabet, that can be...