This paper finds that banks' security affiliates added 4% to 7% to the market value of commercial banks in 1926 and 1927. This result is robust to the inclusion of a large array of control variables, including risk, regulatory environment, and financial health variables such as the capital-asset ratio and profitability measures. Bank size explains about 40% of this premium, thus suggesting that economies of scale were present. The remaining 60% of the premium most likely came from economies of scope. This result implies that the Glass-Steagall Act, by disallowing banks' involvement in the securities industry, had a direct cost in lost market value for the commercial banking industry.
Download Info
To our knowledge, this item is not available for
download. To find whether it is available, there are three
options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page
whether it is in fact available.
3. Perform a search for a similarly titled item that would be
available.
For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).
Related research
Keywords:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)