Changes in Interstate Banking Laws: The Impact on Shareholder Wealth

Black, Harold A.; Fields, M. Andrew; Schweitzer, Robert

doi:10.2307/2328757

Cited by 11 publications

(4 citation statements)

References 2 publications

(2 reference statements)

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“…Restrictions on the geographic operations of U.S. banking organizations have been relaxed substantially in recent years. The ability of these organizations to expand interstate through bank holding company acquisitions has perhaps received the most attention (Black, Fields, and Schweitzer, 1990; Laderman…”

Section: Introductionmentioning

confidence: 99%

Geographical deregulation and competition in U.S. banking markets

Zardkoohi

Fraser

1998

The Financial Review

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The effects of geographical deregulation on competition in banking markets is examined. Using a model that develops an index of competition as proposed by Bresnahan and applied to banking markets by Shaffer, the empirical evidence suggests that geographical deregulation has not had a significant impact on competition. The limited effects of geographical deregulation on competition is consistent with other evidence presented, suggesting that banking markets were already highly competitive. In those states where a significant effect was observed, geographical deregulation increased the degree of competition in some states but had the opposite effect in others.

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Section: Introductionmentioning

confidence: 99%

Geographical deregulation and competition in U.S. banking markets

Zardkoohi

Fraser

1998

The Financial Review

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“…In this paper, the traditional definition of the money center group is used. Black, Fields and Schweitzer [2] and Kane and Unal [13] use a similar definition for money center firms. On balance, money center banks have a multinational dimension and focus to their business strategies, while regional BHCs concentrate on geographic expansion.…”

Section: Innovation and Investment Opportunitiesmentioning

confidence: 99%

“…On balance, money center banks have a multinational dimension and focus to their business strategies, while regional BHCs concentrate on geographic expansion. Regional BHCs lobbied to protect their markets from potential money tenter invasion by establishing regional interstate banking compacts that excluded money center BHCs (See Amel and Keane [I] and Black, Fields, and Schweitzer [2] Higher capital standards forced capital-deficient, money center banks to restrict asset growth, raise external equity, improve profitability to generate more internal equity, or move assets off the balance sheet to avoid capital requirements. Less sensitive to this crisis as a result of their focus on geographic expansion, regional BHCs were positioned to exercise options on profitable opportunities.…”

Section: Innovation and Investment Opportunitiesmentioning

confidence: 99%

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Financial Innovation, Investment Opportunities, and Corporate Policy Choices for Large Bank Holding Companies

Collins

Blackwell

Sinkey

1994

The Financial Review

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This study determines the effects of agency costs on bank management by investigating the relationship between investment opportunities and corporate policy choices for large bank holding companies from 1977 to 1985. The financial innovations in this period resulted in numerous investment opportunities for banks and their holding companies. The market‐to‐book ratio, a proxy for these opportunities or growth options, reveals significant differences in the opportunity sets of regional and money center banks. Since the growth options are negatively related to both debt financing and dividend payout, a policy prescription for reducing bank holding company (BHC) leverage is to allow bank/BHC investment opportunities to expand through product and geographic deregulation.

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