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Diversification, Size and Risk: the Case of Bank Acquisitions of Nonbank Financial Firms

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

Standard Standard

Diversification, Size and Risk: the Case of Bank Acquisitions of Nonbank Financial Firms. / Casu, B.; Dontis-Charitos, P.; Staikouras, S. et al.
In: European Financial Management, Vol. 22, No. 2, 01.03.2016, p. 235-275.

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

HarvardHarvard

Casu, B, Dontis-Charitos, P, Staikouras, S & Williams, JM 2016, 'Diversification, Size and Risk: the Case of Bank Acquisitions of Nonbank Financial Firms', European Financial Management, vol. 22, no. 2, pp. 235-275. https://doi.org/10.1111/eufm.12061

APA

Casu, B., Dontis-Charitos, P., Staikouras, S., & Williams, J. M. (2016). Diversification, Size and Risk: the Case of Bank Acquisitions of Nonbank Financial Firms. European Financial Management, 22(2), 235-275. https://doi.org/10.1111/eufm.12061

CBE

Casu B, Dontis-Charitos P, Staikouras S, Williams JM. 2016. Diversification, Size and Risk: the Case of Bank Acquisitions of Nonbank Financial Firms. European Financial Management. 22(2):235-275. https://doi.org/10.1111/eufm.12061

MLA

Casu, B. et al. "Diversification, Size and Risk: the Case of Bank Acquisitions of Nonbank Financial Firms". European Financial Management. 2016, 22(2). 235-275. https://doi.org/10.1111/eufm.12061

VancouverVancouver

Casu B, Dontis-Charitos P, Staikouras S, Williams JM. Diversification, Size and Risk: the Case of Bank Acquisitions of Nonbank Financial Firms. European Financial Management. 2016 Mar 1;22(2):235-275. Epub 2015 Mar 17. doi: 10.1111/eufm.12061

Author

Casu, B. ; Dontis-Charitos, P. ; Staikouras, S. et al. / Diversification, Size and Risk: the Case of Bank Acquisitions of Nonbank Financial Firms. In: European Financial Management. 2016 ; Vol. 22, No. 2. pp. 235-275.

RIS

TY - JOUR

T1 - Diversification, Size and Risk: the Case of Bank Acquisitions of Nonbank Financial Firms

AU - Casu, B.

AU - Dontis-Charitos, P.

AU - Staikouras, S.

AU - Williams, J.M.

PY - 2016/3/1

Y1 - 2016/3/1

N2 - We investigate the risk effects of bank acquisitions of insurance companies and securities firms between 1991 and 2012 using a newly constructed dataset of MandA deals. We examine risk changes before and after deal announcements by decomposing risk into systematic and idiosyncratic components. Subsequently, we investigate the relationship between risk and diversification by modelling the determinants of risks. We find that bank combinations with securities firms yield higher risks than combinations with insurance companies. Bank size is an important and consistent determinant of risk whereas diversification is not. Our results inform the continuing debate on diversification versus functional separation of bank activities.

AB - We investigate the risk effects of bank acquisitions of insurance companies and securities firms between 1991 and 2012 using a newly constructed dataset of MandA deals. We examine risk changes before and after deal announcements by decomposing risk into systematic and idiosyncratic components. Subsequently, we investigate the relationship between risk and diversification by modelling the determinants of risks. We find that bank combinations with securities firms yield higher risks than combinations with insurance companies. Bank size is an important and consistent determinant of risk whereas diversification is not. Our results inform the continuing debate on diversification versus functional separation of bank activities.

KW - Banks

KW - Nonbank Financial Firms

KW - FInancial Conglomerates

KW - Diversification

KW - Risk Decomposition

KW - Determinants of Risk

UR - https://onlinelibrary.wiley.com/action/downloadSupplement?doi=10.1111%2Feufm.12061&file=eufm12061-sup-0001-SuppApp-S1.docx

U2 - 10.1111/eufm.12061

DO - 10.1111/eufm.12061

M3 - Article

VL - 22

SP - 235

EP - 275

JO - European Financial Management

JF - European Financial Management

SN - 1468-036X

IS - 2

ER -