Wealth Effects of Banks' Rights to Market and Originate Annuities
AbstractWe examine wealth effects, for banks and insurers, of bank rights to sell and underwrite annuities. The stock-price reactions to four court and regulatory decisions are consistent with expectations of bank gains at insurers' expense. Cross-sectionally, smaller, riskier insurers with higher distribution costs and substantial annuity business sustain larger wealth losses. Larger, riskier bank holding companies with fee- based and consumer business gain most, consistent with the extension of federal safety-net guarantees as a source of gains. Banking stock-price reactions to the Supreme Court's decision are opposite other findings, possibly reflecting unfulfilled expectations of a broader mandate for expanded bank rights.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by EconWPA in its series Finance with number 0203002.
Date of creation: 06 Mar 2002
Date of revision:
Note: Type of Document - Acrobat 5.0 PDF; prepared on Windows 2000;
Contact details of provider:
Web page: http://188.8.131.52
Annuities; VALIC; financial modernization; deregulation; deposit insurance; Blackfeet National Bank; event studies;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-06-13 (All new papers)
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.:
- Julie L. Williams & Stuart E. Feldstein & Karen E. Mcsweeney, 1997. "Current Issues Regarding Bank Sales Of Insurance And Annuity Products," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 1(1), pages 65-84, 07.
- Karafiath, Imre, 1988. "Using Dummy Variables in the Event Methodology," The Financial Review, Eastern Finance Association, vol. 23(3), pages 351-57, August.
- Keeley, Michael C, 1990. "Deposit Insurance, Risk, and Market Power in Banking," American Economic Review, American Economic Association, vol. 80(5), pages 1183-1200, December.
- Fred Furlong & Simon Kwan, 1999. "Financial modernization and regulation," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue dec31.
- John, Kose & John, Teresa A. & Senbet, Lemma W., 1991. "Risk-shifting incentives of depository institutions: A new perspective on federal deposit insurance reform," Journal of Banking & Finance, Elsevier, vol. 15(4-5), pages 895-915, September.
- White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
- Fred Furlong & Simon Kwan, 1999. "Financial Modernization and Regulation," Journal of Financial Services Research, Springer, vol. 16(2), pages 95-100, December.
- John J. Binder, 1985. "Measuring the Effects of Regulation with Stock Price Data," RAND Journal of Economics, The RAND Corporation, vol. 16(2), pages 167-183, Summer.
- Marcia Cornett & Hamid Mehran & Hassan Tehranian, 1998. "The Impact of Risk-Based Premiums on FDIC-Insured Institutions," Journal of Financial Services Research, Springer, vol. 13(2), pages 153-169, April.
- Carow, Kenneth A. & Kane, Edward J., 2002.
"Event-study evidence of the value of relaxing long-standing regulatory restraints on banks, 1970-2000,"
The Quarterly Review of Economics and Finance,
Elsevier, vol. 42(3), pages 439-463.
- Kenneth A. Carow & Edward J. Kane, 2001. "Event-Study Evidence of the Value of Relaxing Longstanding Regulatory Restraints on Banks, 1970-2000," NBER Working Papers 8594, National Bureau of Economic Research, Inc.
- Staikouras, Sotiris K., 2009. "An event study analysis of international ventures between banks and insurance firms," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 19(4), pages 675-691, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA).
If references are entirely missing, you can add them using this form.