New Deal financial reforms wrestled with a dilemma that is instructive for contemporary advocates of economic change. A project of financial reform that puts constraints on finance may impair the profitability of financial capitalists, thus provoking financial capital to sabotage the financial...

BHC expansion into nonbank financial activities may increase or decrease the standard deviation of BHC ROA and/or the probability of bankruptcy of the BHC. Using individual firm data and a new application of a simulated merger methodology, I find the standard deviation minimizing and bankruptcy...

An explanation of how the Glass-Steagall Act, passed to prohibit U.S. commercial banks from engaging in investment banking activities, has led to the same costly cat-and-mouse game between banks and their regulators as did the prohibition against interstate banking, and an argument that...

An analysis of the potential effects of commercial banks' expansion into the securities business, focusing on gains, such as information advantages and economies of scope, as well as on potential costs, including conflicts of interest and risk considerations.