Are bank holding companies a source of strength to their banking subsidiaries?
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Are bank holding companies a source of strength to their banking subsidiaries?

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Published by Federal Reserve Bank of New York in [New York, N.Y.] .
Written in English

Subjects:

Places:

  • United States.

Subjects:

  • Bank holding companies -- United States.,
  • Subsidiary corporations -- United States.

Book details:

Edition Notes

StatementAdam B. Ashcraft.
SeriesStaff reports ;, no. 189, Staff reports (Federal Reserve Bank of New York : Online) ;, no. 189.
ContributionsFederal Reserve Bank of New York.
Classifications
LC ClassificationsHB1
The Physical Object
FormatElectronic resource
ID Numbers
Open LibraryOL3476186M
LC Control Number2005615644

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The Federal Reserve Board has long held that the failure of a parent bank holding company to act as a source of strength to a troubled banking subsidiary would be considered 'an unsafe and unsound. In contrast, the source-of-strength doctrine demands that a BHC use the resources in both banking and non-banking subsidiaries to support a distressed subsidiary bank. Second, the FDIC cannot exercise its authority until the subsidiary bank has already by:   In particular, I find that a bank affiliated with a multi-bank holding company is significantly safer than either a stand-alone bank or a bank affiliated with a one-bank holding company. Not only does affiliation reduce the probability of future financial distress, but distressed affiliated banks are more likely to receive capital injections Cited by: Adam B. Ashcraft, "Are Bank Holding Companies a Source of Strength to Their Banking Subsidiaries?," Journal of Money, Credit and Banking, Blackwell .

Are Bank Holding Companies a Source of Strength to Their Banking Subsidiaries? and Enforcement Act of has unexpectedly strengthened the Federal Reserve's source-of-strength doctrine. In particular, I find that a bank affiliated with a multi-bank holding company is significantly safer than either a stand-alone bank or a bank affiliated. Even the FRB's own holding company "source of strength" doctrine is devoted to pushing capital from a holding company, to its subsidiary bank. In other words, lending to a holding company is slightly more risky than lending directly to a bank. The different market rates . Holding companies can be used to purchase problem assets from the bank, consistent with the holding company’s “source of strength” responsibilities. Many holding companies used this very strategy to protect their banks during the financial crisis. I document evidence that a bank affiliated with a multi-bank holding company (MBHC) is significantly safer than either a stand-alone bank or a bank affiliated with a one-bank holding company. Not only does MBHC affiliation reduce the probability of future financial distress, but distressed affiliated banks are also more likely to receive capital injections, recover more quickly, and are less.

Are Bank Holding Companies a Source of Strength to Their Banking Subsidiaries? By ADAM Full citation; Abstract. I document evidence that a bank affiliated with a multi-bank holding company (MBHC) is significantly safer than either a stand-alone bank or a bank affiliated with a one-bank holding company. Not only does MBHC affiliation reduce. CiteSeerX - Document Details (Isaac Councill, Lee Giles, Pradeep Teregowda): A bank affiliated with a multi-bank holding company (MBHC) is significantly safer than either a stand-alone bank or a bank affiliated with a one-bank holding company. Not only does affiliation reduce the probability of future financial distress, but distressed affiliated banks are more likely to receive capital. Are bank holding companies a source of strength to their banking subsidiaries? By Adam B. Ashcraft. and Enforcement Act of has unexpectedly strengthened the Federal Reserve's source-of-strength doctrine. In particular, I find that a bank affiliated with a multi-bank holding company is significantly safer than either a stand-alone bank. Are bank holding companies a source of strength to their banking subsidiaries? "I present evidence that the cross-guarantee authority granted to the FDIC by the Financial Institutions Reform, Recovery, and Enforcement Act of has unexpectedly strengthened the Federal Reserve's source-of-strength doctrine. In particular.