evidence

Jonathan Portes Testimony to PACAC

Written evidence submitted by Jonathan Portes (EUM 01) to the Public Administration and Constitutional Affairs Committee Inquiry into data sharing and the use of administrative records to provide enhanced statistics

Bank Diversification and Valuation: International Evidence

Using a panel of the largest 800 banks from 31 OECD countries between 1998-2012 we investigate whether the diversity of financial institutions affects their valuations. That is whether banks with more diversified operations trade at a premium (reduce risk) or discount (are too complex). We look at both asset diversity and income diversity and price to book and Tobin's q as measures of value. Looking at the whole set we find that it is difficult to empirically verify the role of bank diversity on bank valuations.