Bank holding company expansion into nonbank functions: is the rise in systematic risk rewarded?
Abstract
This study provides evidence regarding the performance of bank holding companies (BHC) following a series of deregulatory measures by the United States Congress. To compare performance of commercial banks before and after expanding their operations to nonbank functions, a set of hypotheses addressing BHC risk and return characteristics are proposed. Empirical results are mixed. Total risk dropped after expansion. Market risk, on the other hand, rose substantially in post‐expansion time. When returns are adjusted for risk, a marginal improvement in performance is achieved.
Keywords
Citation
Pat Obi, C. and Emenogu, A. (2003), "Bank holding company expansion into nonbank functions: is the rise in systematic risk rewarded?", Managerial Finance, Vol. 29 No. 8, pp. 9-22. https://doi.org/10.1108/03074350310768391
Publisher
:MCB UP Ltd
Copyright © 2003, MCB UP Limited