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...

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...

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'...

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...

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...

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...

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...

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...

While both size and complexity are important for the largest U.S. bank holding companies (BHCs), specific types of complexity and their patterns across banks are not well understood. We introduce a range of measures of organizational, business, and geographic complexity. Comparing 2007 with...

"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...

Prospective tenants in England are often asked to put down a holding deposit as a condition of signing a tenancy agreement. A holding deposit is an up-front payment given to the landlord or the landlord's agent to place a “hold” on the property from being rented to anyone else while the...

In this paper we examine the holdings of government securities by domestic banks along with those of five other sectors: foreign banks, foreign non-banks, the official foreign sector, the domestic central bank and domestic non-banks. We use data for 21 advanced economies from 2004 Q1 to 2016 Q2....

In Eurasia, Turkey has a "crony" capitalist system with majority control and business groups (BGs) in the hands of a few families. These business groups are often organised around a holding company. We analyse the dividend payouts of family controlled Borsa Istanbul companies, which are...

Vorwort -- Einleitung -- Beteiligungsmanagement: eine Annäherung -- Selbstverständnis des Mutterunternehmens -- Entwicklung der Beteiligungsstrategie -- Besetzung und Vergütung von Geschäftsführung und Aufsichtsgremium -- Kooperative Zusammenarbeit -- Personalentwicklung und Coaching --...

This paper examines the effect of leverage on the corporate taxes paid by United States Bank Holding Companies. We find that, Bank Holding Companies reduce their tax burden when debt is raised from subsidiaries. However, taxes do not significantly change when debt is raised from the parent firm....

We perform a comprehensive analysis of the US banking system during 2007-2013 period by incorporating specific hedging and trading variables, as well as performance measures. We discover that even though hedging might reduce profitability and firm value, it might also minimize tail risks by a...

This paper is the first to show that financial institutions may be effectively undercapitalized as a result of incomplete consolidation of minority ownership. Using two approaches – consolidating the minority-owned affiliates with the parent or deducting equity investments in minority...

This paper approximates a construction of Basel III's Liquidity Coverage Ratio (LCR) for U.S. bank holding companies. This study examines: (i) the LCR's marginal contribution to a firm's systemic risk and, (ii) whether the LCR can predict ex ante which banks are most exposed to systemic losses...

This article examines the relationship between the amount of information disclosed by bank holding companies (BHCs) and the BHCs' subsequent risk-adjusted performance. Using data from the annual reports of BHCs with large trading operations, the author constructs an index that quantifies the...

Since the recent financial crisis, the procyclical leverage of banks has been highlighted, as it is an important mechanism in propagating financial shocks to the real economy. Procyclical leverage has been identified in investment banks due to the active balance sheet management based on the...

In this study, I analyze the heterogeneous dynamics of the bank risk-taking channel of monetary policy under different business models before the recent financial crisis in the U.S. I find that banks' asset-side risk-taking in a low interest rate environment exhibits heterogeneity across...

A subsidiary failure may deteriorate the bank holding company's (BHC) financial conditions. BHCs' managers possess better knowledge than market investors concerning the likelihood of subsidiary failure, which gives rise to information asymmetry. We examine the effects of this information...

The paper argues that transparency of large corporate farms operating in transition economies is the factor that affects their competitive position as it helps to preserve access to international equity markets and to reduce uncertainty that arises from imperfect local input markets. We...

Bank Holding Companies (BHCs) have been diversifying their businesses increasingly among banking, securities and insurance activities in the recent decades through establishment of Section 20 subsidiaries in earlier years and through formation of financial holding companies after the...

How does business complexity affect risk management in financial institutions? The commonly used risk measures rely on either balance-sheet or market-based information, both of which may suffer from identification problems when it comes to answering this question. Balance-sheet measures, such as...

In the wake of the 2008/2009 financial crisis, a number of policy reports (Vickers, Liikanen, Volcker) proposed to separate investment banking from commercial banking to increase financial stability. This paper empirically examines one theoretical justification for these proposals, namely...

By eliminating the influence of statistical noise, stochastic frontier techniques permit the estimation of the best-practice value of a firmś investment opportunities and the magnitude of a firmś systematic failure to achieve its best-practice market value - a gauge of the magnitude of agency...

How does business complexity affect risk management in financial institutions? The commonly used risk measures rely on either balance-sheet or market-based information, both of which may suffer from identification problems when it comes to answering this question. Balance-sheet measures, such as...

This Article examines the extent to which financial holding companies formed under the Gramm-Leach-Bliley Act (GLB Act) will bear the costs of the failure of their bank subsidiaries. Pre-GLB Act banking law provided numerous ways to impose liability on bank holding companies for bank failure....