Expanded securities underwriting: Implications for bank risk and return

Diversification, Fee Income, and Credit Union Risk

“…Eisenbeis et al (1984) examine the announcement effects of the formation of bank holding companies on shareholder returns and conclude that diversification enhances bank value. However, Apilado et al (1993) find only weak support for the hypothesis that bank expansion into securities underwriting activities is value enhancing. Brewer (1989) examines the effect of non-banking activities on bank holding company (BHC) risk and finds that they are associated with a reduced probability of bankruptcy.…”

The effect of the Gramm-Leach-Bliley Act on the insurance industry

“…Section 20 relaxation GLB passage Apilado, Gallo, and Lockwood (1993) Commercial banks and investment banks 1987 √ Positive reaction for commercial banks, negative reaction for investment banks. Bhargava and Fraser (1998) Commercial banks 1987-1999 √ Positive reaction for initial relaxation of Section 20 limits, but negative for subsequent changes.…”

The Performance of Bank‐managed Mutual Funds

“…Mutual funds appear to be a logical extension of the traditional investment management services offered by banks through their trust departments. However, the Glass‐Steagall Act of 1933 barred banks from engaging in most securities activities (Apilado, Gallo, and Lockwood (1993)). The Act left banks free only to manage fund assets and to broker funds whose assets they do not manage.…”