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An Examination of the Impact of the Garn-St. Germain Depository Institutions Act of 1982 on Commercial Banks and Savings and Loans

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  • Millon-Cornett, Marcia H
  • Tehranian, Hassan

Abstract

This paper evaluates the effects of events leading to the passage of the Garn-St. Germain Depository Institutions Act of 1982. The evidence suggests that the call for reform by President Reagan's Housing Commission and the Senate passage of the bill produced positive abnormal returns to stockholders of large savings and loans and commercial banks. Stockholders of small S&Ls and banks, on the other hand, generally experienced negative abnormal returns. Furthermore, when hopes of passage of the act faded, significant negative (positive) abnormal returns were experienced by stockholders of large (small) S&Ls and banks. Copyright 1990 by American Finance Association.

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  • Millon-Cornett, Marcia H & Tehranian, Hassan, 1990. "An Examination of the Impact of the Garn-St. Germain Depository Institutions Act of 1982 on Commercial Banks and Savings and Loans," Journal of Finance, American Finance Association, vol. 45(1), pages 95-111, March.
    • Handle: RePEc:bla:jfinan:v:45:y:1990:i:1:p:95-111
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    9. Atul Gupta & Lalatendu Misra, 2007. "Deal size, bid prremium, and gains in bank mergers: The impact of managerial motivations," Working Papers 0018, College of Business, University of Texas at San Antonio.
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    14. Atul Gupta & Bently Lalatendu Misra, 2007. "Deal size, bid premium, and gains in bank mergers: The impact of managerial motivations," Working Papers 0004, College of Business, University of Texas at San Antonio.
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    19. Bongini, Paola & Nieri, Laura & Pelagatti, Matteo, 2015. "The importance of being systemically important financial institutions," Journal of Banking & Finance, Elsevier, vol. 50(C), pages 562-574.
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    21. Bittlingmayer, George & Hazlett, Thomas W., 2000. "DOS Kapital: Has antitrust action against Microsoft created value in the computer industry?," Journal of Financial Economics, Elsevier, vol. 55(3), pages 329-359, March.
    22. McKenzie, Michael D. & Brooks, Robert D. & Faff, Robert W. & Ho, Yew Kee, 2000. "Exploring the economic rationale of extremes in GARCH generated betas The case of U.S. banks," The Quarterly Review of Economics and Finance, Elsevier, vol. 40(1), pages 85-106.
    23. Kathy Czyrnik & Linda Schmid Klein, 2004. "Who Benefits from Deregulating the Separation of Banking Activities? Differential Effects on Commercial Bank, Investment Bank, and Thrift Stock Returns," The Financial Review, Eastern Finance Association, vol. 39(2), pages 317-341, May.
    24. Bongini, Paola & Nieri, Laura & Pelagatti, Matteo & Piccini, Andrea, 2017. "Curbing systemic risk in the insurance sector: A mission impossible?," The British Accounting Review, Elsevier, vol. 49(2), pages 256-273.
    25. David A. Carter & Daniel A. Rogers & Betty J. Simkins & Stephen D. Treanor, 2013. "Does hedging reduce economic exposure? Hurricanes, jet fuel prices and airlines," Chapters, in: Adrian R. Bell & Chris Brooks & Marcel Prokopczuk (ed.), Handbook of Research Methods and Applications in Empirical Finance, chapter 14, pages 341-354, Edward Elgar Publishing.

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