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The State of Delaware recently passed a new banking law that allows banks and bank affiliates chartered in Delaware to sell and underwrite insurance nationwide. The new laws provide two potential benefits to banks; (1) increased profits from selling insurance and (2) reduced interest rate risk exposure from underwriting insurance. We find support for increased profit potential to banks from the law, but we fail to find a reduction in the interest rate risk exposure of the banks.

The Growth of Institutional Shareholdings 1966–1980. Institutional investors, particularly insurance companies and pension funds, are consistent purchasers of company and overseas securities. Of particular interest is the ownership of U.K. quoted equities, rather than ownership of debentures, preference shares and overseas securities. Ownership of the ordinary share capital is of particular interest because the votes attached to equities give the holders legal powers to influence management through general meetings. The impact of the growth of institutional shareholdings on corporate management and the London Stock Exchange will be discussed in later articles. This article demonstrates the growth of institutional ownership of British industry, comments on the concentration of institutional holdings in large companies, illustrates the avoidance of new issues by financial institutions, and comments on the future pattern of U.K. share ownership.

A comprehensive review of UK share ownership during the 1966–1980 period, with particular reference to the work of Revell and Moyle at the Department of Applied Economics, Cambridge.

Institutional investors—insurance companies, pension funds, investment trust companies and unit trusts—have increased significantly and persistently their ownership of British industry. At the end of 1977 they owned approximately 46 per cent of the ordinary shares in UK quoted companies and in recent years have accounted for over 50 per cent of stock market turnover in UK equities. Their presence in the stock market has been associated with their ability to influence share prices, decide the outcome of takeover battles, and trade outside the London Stock Exchange. As major shareholders in public companies they have been encouraged to participate in managerial decision‐making. For corporate management, the growth of institutional shareholdings provides opportunities to utilise their voting power in takeover situations, encourage their support for the market value of the company, and use financial institutions as sources of new capital.

U.S. bank holding companies (BHCs) have experienced dynamic changes over a period of 2000–2010. We find that the size distribution of sample banks becomes highly positively skewed with a small number of big banks becoming super-sized, and these big banks tend to take extra risk by holding derivative positions for trading purposes. The ten largest risk-taking banks hold about 70% of total assets of all the sample banks in 2010. We investigate whether the risk-taking activities of the BHCs translate into higher risk-adjusted return performance. In extensive panel regression analyses, we find that the risk-taking strategies of large banks by holding derivative positions for trading purpose do not show the clear evidence of enhancing risk-adjusted performance. We find that negative impacts of extra risk-taking on the risk-adjusted performance become bigger with the size of banks.

To examine the value relevance of the Balanced Scorecard (BSC) for equity valuation.

The investigations are based on the empirical relationships between a set of BSC indicators and the exchange ratios for a sample of 32 mergers and acquisitions (M&As) of 14 financial holding companies. Data sources are collected from machine‐readable database, annual financial reports, industry reports and professional magazines. The study period covers years 2000‐2002.

First, the BSC indicators explain as high as 90 percent of the variations of the exchange ratios. Consistent with the spirit of BSC, non‐financial performance measures play an important role in the valuation of financial institutions, incrementally improving about 40 percent of explanatory power. Second, empirical evidence shows that acquiring firms outperform the acquired firms and target firms outperform the non‐target firms in terms of BSC measures.

The small sample size and the limited set of the BSC indicators may constrain the applicability of the results to other industries and time periods.

The empirical results provide a concrete and practical framework for the valuation of intangibles and the application of the BSC in M&As.

The study examines the BSC as a framework for the valuation of intangibles. The empirical results support the usefulness of the BSC in equity valuation and further corroborate a number of extant theories in the M&A literature.

The purpose of this paper is to illustrate the regulatory challenges that financial institutions around the world face in entering the US market.

The paper provides examples of the intricacies in US banking regulation that a financial institution has to think though as it considers buying US assets, including selected provisions of the Bank Holding Company Act, the nature of Federal Reserve jurisdiction and supervision, competition among various federal and state regulators, and dangers related to class action suits and intrusive discovery in civil proceedings.

The paper finds that as soon as a foreign bank buys or opens a US bank, it becomes a bank holding company under Federal Reserve jurisdiction. Often there is competition among regulators; securities markets are mostly regulated at the national level, but each state also has its own code. Another new factor is cooperation among international law enforcement agencies. Class actions and intrusive discovery, for example tens of millions of pages of e‐mail records, are the most expensive potential problems.

The paper contains guidance and insight from experienced financial services lawyers.

As financial markets across the world become more integrated, the potential for financial shocks to be transmitted both from one jurisdiction to another and from one financial sector to another increases. At the same time differences in national regulatory arrangements can be the source of important competitive distortions between financial institutions. Against this background national authorities have been seeking to coordinate the regulation of securities firms and of banks undertaking securities business. This paper, which is published in two parts, aims to clarify some of the policy issues arising from recent convergence initiatives by examining the US capital adequacy rules for US investment firms and contrasting the US approach with European securities regulation as formulated in the Capital Adequacy Directive. The second part of this paper will be published in the next issue of Journal of Financial Regulation & Compliance.

This analysis attempts a comparative specification of certain aspects of the country studies contained in this volume. The point of departure is the banking crises of the early 1990s (deep in Finland, Norway and Sweden, mini-crisis in Denmark and absent in Iceland) and the contrast to Iceland's financial meltdown in 2007/2008 (no crisis in the three, a new mini-crisis in Denmark). Detailed process tracing of the Icelandic crisis is provided. The case account is then used to shed light on the different roles of neoliberalism, economics expert knowledge and populist right-wing party formation in the five Nordic political economies.