This paper reviews the arguments as to whether the location of the securities unit in a banking conglomerate should be subject to regulation. This review is complemented with evidence on the regulations and on securities units' predominant location in the G--10 countries and in the United States...

This paper analyzes the potential effects of commercial banks' expansion into the securities business, taking into account the underlying conditions assumed by the modern literature to explain the existence of financial intermediaries. The analysis focuses on the gains claimed to emerge with...

This paper analyzes the potential effects of commercial banks' expansion into the securities business, taking into account the underlying conditions assumed by the modern literature to explain the existence of financial intermediaries. The analysis focuses on the gains claimed to emerge with...

Researchers' attempts to identify the valuation of collateral has been hampered by data limitations. We overcome this challenge by comparing spreads on loans originated by the same bank, to the same firm, at the same origination date, but with different types of collateral. We find that securing...

We show that efficiency is greater when financial institutions simultaneously offer different products, such as banking, insurance and investment banking (cross selling). Our results are based on the fact that offering multiple products improves the no-deviation constraints of the implicit...

We find some support for theories predicting that the presence of informed investors adversely affects liquidity: When arrangers retain a share in the loan this impacts negatively liquidity. We find strong evidence that investor diversity is beneficial to liquidity: Loans with larger syndicates;...

Using information from bonds issued over the past twenty years, this study finds that the largest banks have a cost advantage vis-à-vis their smaller peers. This cost advantage may not be entirely due to investors' belief that the largest banks are “too big to fail” because the study also...

We take a macroprudential approach to analyze the optimal lending policy for the central bank, focusing on externalities that policy imposes on private markets. Lending against high-quality collateral protects central banks against losses but can adversely affect liquidity creation in markets...

This paper investigates the incentives for banks to bias their internally generated risk estimates. We are able to estimate bank biases at the credit level by comparing bank-generated risk estimates within loan syndicates. The biases are positively correlated with measures of regulatory capital,...

We document that the quasi-mandatory U.S. flood insurance program reduces mortgage lending along both the extensive and intensive margins. We measure flood insurance mandates using FEMA flood maps, focusing on the discreet updates to these maps that can be made exogenous to true underlying flood...