On the portfolio effects of financial convergence - a review of the literature
Abstract: This paper reviews the literature on the effects of combining banking and nonbank financial activities on banking organizations' risk and return. In general, securities activities, insurance agency, and insurance underwriting are all riskier and more profitable than banking activities. They also have the potential to provide diversification benefits to banking organizations. While real estate agency, title abstract activities, and real estate operation are more profitable than banking, real estate development may not be. Real estate activities are riskier than banking activities in general, and their diversification benefits for banking organizations are less clear.
File(s): File format is application/pdf http://www.frbsf.org/econrsrch/econrev/99-2/18-31.pdf
Provider: Federal Reserve Bank of San Francisco
Part of Series: Economic Review
Publication Date: 1999
Pages: 18-31Order Number: 2