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Journal article 769 views 83 downloads

Can parents protect their children? Risk comparison analysis between affiliates of multi- and single-bank holding companies

Kim Cuong Ly, Frank Hong Liu, Kwaku Opong, Kim Cuong Ly Orcid Logo

Journal of Financial Stability, Volume: 37, Pages: 1 - 10

Swansea University Author: Kim Cuong Ly Orcid Logo

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DOI (Published version): 10.1016/j.jfs.2018.05.001

Abstract

We find that multi-bank holding companies (MBHCs) in the U.S. have lower insolvency risk than single-bank holding companies (SBHCs) at the parent level, but have significantly higher insolvency risk than the latter at the subsidiary level. Our results suggest that MBHC parents tend to benefit from t...

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Published in: Journal of Financial Stability
ISSN: 15723089
Published: 2018
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URI: https://cronfa.swan.ac.uk/Record/cronfa39978
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first_indexed 2018-05-06T04:35:32Z
last_indexed 2019-03-16T19:48:16Z
id cronfa39978
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spelling 2019-03-16T15:54:59.9200043 v2 39978 2018-05-05 Can parents protect their children? Risk comparison analysis between affiliates of multi- and single-bank holding companies 06f8b2f66ecfb3ec21bd129e86e3e0ea 0000-0001-5856-4560 Kim Cuong Ly Kim Cuong Ly true false 2018-05-05 BAF We find that multi-bank holding companies (MBHCs) in the U.S. have lower insolvency risk than single-bank holding companies (SBHCs) at the parent level, but have significantly higher insolvency risk than the latter at the subsidiary level. Our results suggest that MBHC parents tend to benefit from the internal capital market while allowing for more risk-taking at the individual levels. We further find that the higher risk for MBHC affiliates is because of the organizational and geographic complexity at the MBHC parent level. Our results highlight the importance of government regulation on banks at both parent and subsidiary levels. Journal Article Journal of Financial Stability 37 1 10 15723089 insolvency risk; complexity; internal capital market; stand-alone banks; bank holding companies’ affiliates 31 8 2018 2018-08-31 10.1016/j.jfs.2018.05.001 COLLEGE NANME Accounting and Finance COLLEGE CODE BAF Swansea University 2019-03-16T15:54:59.9200043 2018-05-05T20:36:14.8707157 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Kim Cuong Ly 1 Frank Hong Liu 2 Kwaku Opong 3 Kim Cuong Ly 0000-0001-5856-4560 4 0039978-05052018203726.pdf Acceptedmanuscript-Canparentsprotecttheirchildren.pdf 2018-05-05T20:37:26.2270000 Output 656746 application/pdf Accepted Manuscript true 2019-11-05T00:00:00.0000000 18 month embargo. CC-BY-NC-ND. true eng
title Can parents protect their children? Risk comparison analysis between affiliates of multi- and single-bank holding companies
spellingShingle Can parents protect their children? Risk comparison analysis between affiliates of multi- and single-bank holding companies
Kim Cuong Ly
title_short Can parents protect their children? Risk comparison analysis between affiliates of multi- and single-bank holding companies
title_full Can parents protect their children? Risk comparison analysis between affiliates of multi- and single-bank holding companies
title_fullStr Can parents protect their children? Risk comparison analysis between affiliates of multi- and single-bank holding companies
title_full_unstemmed Can parents protect their children? Risk comparison analysis between affiliates of multi- and single-bank holding companies
title_sort Can parents protect their children? Risk comparison analysis between affiliates of multi- and single-bank holding companies
author_id_str_mv 06f8b2f66ecfb3ec21bd129e86e3e0ea
author_id_fullname_str_mv 06f8b2f66ecfb3ec21bd129e86e3e0ea_***_Kim Cuong Ly
author Kim Cuong Ly
author2 Kim Cuong Ly
Frank Hong Liu
Kwaku Opong
Kim Cuong Ly
format Journal article
container_title Journal of Financial Stability
container_volume 37
container_start_page 1
publishDate 2018
institution Swansea University
issn 15723089
doi_str_mv 10.1016/j.jfs.2018.05.001
college_str Faculty of Humanities and Social Sciences
hierarchytype
hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Management - Accounting and Finance{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management - Accounting and Finance
document_store_str 1
active_str 0
description We find that multi-bank holding companies (MBHCs) in the U.S. have lower insolvency risk than single-bank holding companies (SBHCs) at the parent level, but have significantly higher insolvency risk than the latter at the subsidiary level. Our results suggest that MBHC parents tend to benefit from the internal capital market while allowing for more risk-taking at the individual levels. We further find that the higher risk for MBHC affiliates is because of the organizational and geographic complexity at the MBHC parent level. Our results highlight the importance of government regulation on banks at both parent and subsidiary levels.
published_date 2018-08-31T03:50:50Z
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score 11.016503

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