Seminario académico de Finanzas y Contabilidad

06 de diciembre, 13:00 horas, sala P 307, Facultad de Economía y Negocios

Título: Holding Company Affiliation and Risk: Evidence from the US Banking Sector

Expositora:
Consuelo Silva, académica de la Pontificia Universidad Católica de Chile

Abstract

This paper studies the relationship between bank holding company affiliation and the individual and systemic risk of banks. Using the 2005 hurricane season in the US as an exogenous shock to bank balance sheets, we show that banks that are part of a holding company are more resilient than independent banks. Examining the impact of the liquidity of the holding on resiliency shows that banks are more fragile when the liquidity of the holding is lower, consistent with internal capital markets playing a role in stabilizing banks. We also show that banks whose holdings display low liquidity levels rebalance their portfolios towards riskier activities, such as non-traditional banking activities.