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Working Paper
The Financial Modernization Act: evolution or revolution?
The Gramm-Leach-Bliley Act (GLBA) removed the barriers that separated commercial banking from investment banking, merchant banking, and insurance activities. Did this legislation revolutionize the financial services industry by allowing Financial Holding Companies (FHCs) to exploit revenue efficiencies and cost economies, or did it merely formalize an evolutionary process of deregulation that was already well underway? Our evidence refutes the notion that the GLBA was a revolutionary event, at least in the short run. Using a combination of market and accounting data, we find that, to date, ...
Working Paper
New evidence on state banking before the Civil War
Prior to the Civil War there were three major differences among states in how U.S. banks were regulated: (1) Whether they were established by charter or under free-banking laws. (2) Whether they were permitted to branch. (3) Whether the state established a state-owned bank. I use a census of the state banks that existed in the United States prior to the Civil War that I recently constructed to determine how these differences in state regulation affected the banking outcomes in these states. Specifically, I determine differences in banks per capita by state over time; bank longevities ...
Journal Article
The door is open, but banks are slow to enter insurance and investment arenas
Congress opened the door five years ago for banks to enter the insurance and investment arenas, but the expected rush has yet to occur. That's probably fine with critics, who feared that the return of universal banks would bring back Depression-like instability.