New Research Interests

"What's Different about Bank Holding Companies?" Appendix

The recent financial crisis highlighted the role of Bank Holding Companies (BHCs) in exacerbating the crisis and in transmitting monetary policy beyond the local economy to global markets. Yet, little is known about their behavior, as most models of banking typically focus on banks with a loan desk. We develop a dynamic model of a BHC that encompasses both a trading desk and a loan desk, and explore the role of risk attitude and overleveraging by the trading desk. We trace the impact of monetary policy and market innovations on bank behavior in the presence of Basel III type regulations. To our knowledge, this is a first such exercise. We show that the value of the BHC is enhanced by operating both desks, even if they both are subject to common market shocks. We explore alternative regulatory remedies to ongoing efforts to ring-fence the proprietary trading business, and show that regulations that target bank governance can mitigate possible rogue trading and the overleveraging problem.


  • Articles
  • Books
  • Book Reviews
  • Working Papers
  • "Macroeconomic Consequences of Remittances", Edited by Ralph Chami, Adolfo Barajas, Thomas F. Cosimano, Connel Fullenkamp, Michael Gapen, and Peter Montiel. Published by International Monetary Fund, Washington, DC, 2008.
  • Guest Editor, Journal of Banking and Finance, 26 (2002) for the conference volume from "Measuring and Managing Ethical Risk: How Investing in Ethics Adds value." Co-Authors Ralph Chami and Connel Fullencamp.
  • "The Changing Distribution of Income in an Open US Economy", Edited by Jeffery H. Bergstrand, Thomas F. Cosimano, John W. Houck and Richard G. Sheehan, published in the series Contributions to Economic Analysis, Edited by D. W. Jorgenson and J. J. Laffont by Elsevier Science Punlishers B.V. 1994.
  • "Money and Financial Markets" edited by Mark P. Taylor Cambridge, MA:  Blackwell Publishers, 1991. Invited by Journal of Money, Credit and Banking, November 1993 864-867.

Honor Students Senior Thesis

Department of Mathematics, University of Notre Dame