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Interconnectedness of Financial Conglomerates

Author

Listed:
  • Gaël Hauton

    (Autorité de Contrôle Prudentiel et de Résolution (ACPR), 61 rue Taitbout, Paris 75009, France)

  • Jean-Cyprien Héam

    (Autorité de Contrôle Prudentiel et de Résolution (ACPR), 61 rue Taitbout, Paris 75009, France
    Centre de Recherche en Économie et Statistique (CREST), 15 Boulevard Gabriel Péri, Malakoff 92240, France)

Abstract

Being active in both the insurance sector and the banking sector, financial conglomerates intrinsically increase the interconnections between the banking sector and the insurance sector. We address two main concerns about financial conglomerates using a unique database on bilateral exposures between 21 French financial institutions. First, we investigate to what extent to which the insurers that are part of financial conglomerates differ from pure insurers. Second, we show that in the presence of sovereign risk, the components of a financial conglomerate are better off than if they were distinct entities. Our empirical findings bring a new perspective to the previous results of the literature based on using different types of data.

Suggested Citation

  • Gaël Hauton & Jean-Cyprien Héam, 2015. "Interconnectedness of Financial Conglomerates," Risks, MDPI, vol. 3(2), pages 1-25, May.
    • Handle: RePEc:gam:jrisks:v:3:y:2015:i:2:p:139-163:d:49931
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    References listed on IDEAS

    as
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