TY  - JOUR
AU  - Carow,Kenneth A.
AU  - Kane,Edward J.
TI  - Event-Study Evidence of the Value of Relaxing Longstanding Regulatory Restraints on Banks, 1970-2000
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8594
PY  - 2001
Y2  - November 2001
UR  - http://www.nber.org/papers/w8594
L1  - http://www.nber.org/papers/w8594.pdf
N1  - Author contact info:
Edward J. Kane
2325 E Calle Los Altos
Tucson, AZ 85718
Tel: 520-299-5066
E-Mail: edward.kane@bc.edu
AB  - In a partial-equilibrium model, removing a binding constraint creates value.  However, in general equilibrium, the stakes of other parties in maintaining the constraint must be examined.  In financial deregulation, the fear is that expanding the scope and geographic reach of very large institutions might unblock opportunities to build market power from informational advantages and size-related safety-net subsidies. This paper reviews and extends event-study evidence about the distribution of the benefits and costs of relaxing longstanding geographic and product-line restrictions on U.S. financial institutions.  The evidence indicates that the new financial freedoms may have redistributed rather than created value.  Event returns are positive for some sectors of the financial industry and negative for others.  Perhaps surprisingly, where customer event returns have been investigated, they prove negative.
ER  -