Société Générale de Belgique was the world's first universal bank. It pioneered another innovation: investing in non-listed equity. We use hand-collected data to show that the bank earned significant positive risk-adjusted returns from 1850 to 1934. This offset its flat return on the listed...

U.S. bank holding companies (BHCs) have developed a very significant nonbank footprint over the years, adding thousands of specialty lenders, brokers and dealers, asset management, and insurance subsidiaries to their organizations. These nonbank subsidiaries represent a sizeable share of...

Holding companies legally separate the assets and owners of a company creating a layer of liability protection. Theoretically, this feature lowers the risk attributable to holding companies, enabling them to offer lower-cost debts compared to stand-alone alternatives. However, no study has ever...

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...

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...

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,...

This paper uses confidential data on audit engagement partner names from regulatory filings of bank holding companies (BHC) to investigate whether partners display individual style that affects the financial reporting of the BHCs. We focus on loan loss provisioning. We construct an audit...

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...

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...

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 study investigates the intragroup flows of brand royalties within large Korean business groups, known as chaebols. We find that member firms pay a greater amount of brand royalties when the business groups they are part of adopt a holding company governance structure, consistent with the...

This book attempts to illustrate the case of performance evaluation of Chinese financial holding companies. The question motivating the book is: with the deepening of reforms such as interest rate liberalization, the profitability of some traditional commercial banks has declined. In this...

This paper is produced as an exploratory study with the aim of carrying out a taxonomy of construction companies operating in the Czech Republic, taking into account the type and number of concluded public procurement contracts. In processing the multidimensional matrix describing the companies,...

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...

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...

The purpose of this study is to identify the effect of free cash flow on the profitability of the Diversified Holding companies listed in the Colombo Stock Exchange. This study will facilitate individual and institutional investors with information to take appropriate decision, as this paper...

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...

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...

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...

This article provides a critical analysis of the rulings from the European Court of Justice in six Danish cases on the use of holding companies for cross-border dividends and interest, the so-called "Danish beneficial ownership cases". The rulings are analysed in light of their unique facts 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 article analyses the recent rulings of the Court of Justice of the European Union in two Danish cases and examines their possible impact on international tax avoidance. These rulings regard limitations of tax benefits related to cross-border dividend payments resulting from the...

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...

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...

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'...

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...