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Bank shareholder wealth effects of California's proposition 103

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Abstract

Proposition 103, approved by California voters on November 8, 1988, allows California state-chartered banks to become vendors of life, health, and property-liability insurance products. It is hypothesized that such a regulatory realignment should have resulted in a wealth increase for California state-chartered banks. An examination of the market response among these banks indicates a statistically significant positive stock price response on the dates of passage of Proposition 103 and a subsequent Supreme Court ruling upholding its constitutionality.

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Authors and Affiliations

  1. Department of Economics and Finance, Louisiana Tech University, 71272, Ruston, LA

    Roger M. Shelor (Assistant Professor of Finance) & Mark L. Cross (Professor of Finance and Insurance)

Authors
  1. Roger M. Shelor
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  2. Mark L. Cross
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Shelor, R.M., Cross, M.L. Bank shareholder wealth effects of California's proposition 103. J Finan Serv Res 8, 45–55 (1994). https://doi.org/10.1007/BF01052938

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  • DOI: https://doi.org/10.1007/BF01052938

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