Examining Financial Holding Companies


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Examining Financial Holding Companies :.


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Examining Financial Holding Companies


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Examining financial holding companies : should banks control power plants, warehouses, and oil refineries? : hearing before the Subcommittee on Financial Institutions and Consumer Protection of the Committee on Banking, Housing, and Urban Affairs, United States Senate, One Hundred Thirteenth Congress, first session, on examining permissible banking activities under the Bank Holding Company A







Savings and Loan Holding Companies


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The Role of Bank Capital in Bank Holding Companies’ Decisions


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This paper examines the role of bank capital in decision-making by bank holding companies (BHCs) in the United States. Following Chami and Cosimano’s (2001) call option approach to bank capital, BHCs optimally choose the amount of capital to insure the bank against becoming capital constrained in the future. We provide empirical support for this model, and find that a higher optimal level of capital leads to higher loan rates. Furthermore, higher loan rates result in lower amounts of lending. Thus, an increase in capital requirements is likely to lead to higher loan rates and a significant reduction in lending.




Federal Structure for Examining Financial Institutions


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