Effects of the 1970 Bank Holding Company Act: Evidence from Capital Markets

JOSEPH AHARONY; ITZHAK SWARY

doi:10.1111/j.1540-6261.1981.tb04887.x

Effects of the 1970 Bank Holding Company Act: Evidence from Capital Markets

JOSEPH AHARONY^*, ITZHAK SWARY

^*Corresponding author for this work

Coller School of Management

Research output: Contribution to journal › Article › peer-review

Abstract

This study measures the effects of the 1970 amendment to the Bank Holding Company (BHC) Act on the profitability and risk of BHCs using capital market data. Differences in abnormal returns and risk among three portfolios of bank shares which differ in their regulatory status are examined in various periods preceding and following the enactment. No significant differences in performance and no change in the relative risk of any pair of portfolios were observed. Thus, the null hypothesis that the nonbank expansion provisions of the 1970 amendment had no effect on BHCs' risk and profitability cannot be rejected. 1981 The American Finance Association

Original language	English
Pages (from-to)	841-853
Number of pages	13
Journal	Journal of Finance
Volume	36
Issue number	4
DOIs	https://doi.org/10.1111/j.1540-6261.1981.tb04887.x
State	Published - Sep 1981

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Effects of the 1970 Bank Holding Company Act: Evidence from Capital Markets

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