Effects of separating commercial and investment banking: Evidence from the dissolution of a joint venture investment bank

• 成果类型: Article
• 署名作者: Akiyoshi, Fumio
• 署名单位: Kwansei Gakuin University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2019.05.004
• 发表日期: 2019
• 页码: 703-714
• 关键词: Glass-Steagall Act; universal banking; Informational economies of scope; Certification effect

摘要

This study investigates how firms are affected by the separation of commercial and investment banking, using unique data from the dissolution of Japan's Daiwa Securities SMBC, a joint venture investment bank. This event prevented its client firms from receiving a combination of lending and underwriting services. After the dissolution, these firms experienced a sharper decline in market value, more frequent switching of seasoned equity offering (SEO) underwriters, and the disappearance of lower SEO discounts when they had close lending relationships with Sumitomo Mitsui Financial Group, the ex-parent commercial bank. Thus, separating the two banking businesses would impose costs on firms. (C) 2019 Elsevier B.V. All rights reserved.