000			02897cam a22003137 4500
001			w5256
003			NBER
005			20211020114228.0
006			m o d
007			cr cnu||||||||
008			210910s1995 mau fo 000 0 eng d
100	1		_aKroszner, Randall S. _914605
245	1	0	_aOrganization Structure and Credibility: _bEvidence from Commercial Bank Securities Activities Before the Glass-Steagall Act / _cRandall S. Kroszner, Raghuram G. Rajan.
260			_aCambridge, Mass. _bNational Bureau of Economic Research _c1995.
300			_a1 online resource: _billustrations (black and white);
490	1		_aNBER working paper series _vno. w5256
500			_aSeptember 1995.
520	3		_aThis paper investigates how organizational structure can affect a firm's ability to compete. In particular, we examine the two ways in which U.S. commercial banks organized their investment banking operations before the 1933 Glass-Steagall Act forced the banks to leave the securities business: as an internal securities department within the bank and as a separately incorporated and capitalized securities affiliate. We document a strong movement toward the use of the affiliate structure during the 1920s, and regulation does not appear to explain this evolution. While departments underwrote seemingly higher quality firms and securities than did comparable affiliates, the departments obtained lower prices for the issues they underwrote. This evidence is consistent with the hypothesis that there was a perception of potential conflicts of interest when lending and underwriting were closely combined in the departmental structure. We find evidence that bank managers during this period were concerned about such perceptions. We then develop further tests to support the view that by distancing underwriting activities from lending operations, banks could more credibly certify the quality of the issues they underwrote, thereby obtaining higher prices for them. Our results suggest that internal organization may indeed affect the activities and effectiveness of a firm. They also suggest that bank regulators' interest in 'firewalls' between commercial and investment banking may be reasonable, but that the market may propel banks to adopt an internal structure that would address regulators' concerns.
530			_aHardcopy version available to institutional subscribers
538			_aSystem requirements: Adobe [Acrobat] Reader required for PDF files.
538			_aMode of access: World Wide Web.
588	0		_aPrint version record
700	1		_aRajan, Raghuram G.
710	2		_aNational Bureau of Economic Research.
830		0	_aWorking Paper Series (National Bureau of Economic Research) _vno. w5256.
856	4	0	_uhttps://www.nber.org/papers/w5256
856			_yAcceso en línea al DOI _uhttp://dx.doi.org/10.3386/w5256
942			_2ddc _cW-PAPER
999			_c343096 _d301658