Winners and Losers as Financial Service Providers Converge: Evidence from the Financial Modernization Act of 1999
The Financial Modernization Act of 1999 dramatically increased insurers’ and investment banks’ authority to provide an array of financial services and allowed commercial banks to offer investment banking and insurance services. In this paper we examine the market response to this legislation. We fin...
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| Veröffentlicht in: | The Financial review (Buffalo, N.Y.) N.Y.), 2002-02, Vol.37 (1), p.53-72 |
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| container_title | The Financial review (Buffalo, N.Y.) |
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| creator | Hendershott, Robert J. Lee, Darrell E. Tompkins, James G. |
| description | The Financial Modernization Act of 1999 dramatically increased insurers’ and investment banks’ authority to provide an array of financial services and allowed commercial banks to offer investment banking and insurance services. In this paper we examine the market response to this legislation. We find a strong positive response among insurance companies and investment banks, and no significant response among commercial banks. Larger institutions in all three financial sectors earn higher abnormal returns. Additionally, better performing banks earn higher abnormal returns. Our results suggest that allowing financial convergence can add value through synergies and that large players are needed to exploit the scope economies. |
| doi_str_mv | 10.1111/1540-6288.00004 |
| format | Article |
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| ispartof | The Financial review (Buffalo, N.Y.), 2002-02, Vol.37 (1), p.53-72 |
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| language | eng |
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| source | Business Source Complete; Wiley Online Library All Journals |
| subjects | Commercial banks Convergence Deregulation Effects Financial services Financial Services Modernization Act 1999-US Glass-Steagall Investment banking Modernization Rates of return Studies |
| title | Winners and Losers as Financial Service Providers Converge: Evidence from the Financial Modernization Act of 1999 |
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