Synergies between Corporate and Private Banking

Posted: 4 Nov 2009

See all articles by Stefano Caselli

Stefano Caselli

Bocconi University - Department of Finance

Date Written: 2005

Abstract

The financial structures of family businesses are examined through several variables and analytical relationships relating to failure costs and fiscal advantages. Three components associated with failure costs include expected loss of returns, costs of portfolio re-allocation, and social costs. From a fiscal perspective, prescriptions can be applied to understand the equilibrium between capital structure and ownership relations. The relationship between the owner family and the owned firm can be understood through a system of assets and financial connections. However, these perspectives usually intertwine and differ in the possible modes of lending financial resources to a firm. The following variables were assessed in order to understand the financial connection between the family and the firm: (1) the modes of development of the firm's external financial requirements, and (2) the impact of fiscal variables in relation to the firm-family exchange of financial resources. From an assets perspective, shareholding seems to be the main component that contributed to risk, return, and growth of wealth. However, shareholding value is greatly influenced by family objectives and therefore can be analyzed through two macro situations (identifing value from a narrow and broad perspective). Furthermore, several synergies are identified in order to understand clearly the association between the family and the firm in relation to financial and assets perspectives.(NEE)

Keywords: Ownership structures, Private firms, Assets, Financial management, Capital structure, Operator ownership, Family firms, Shareholders

Suggested Citation

Caselli, Stefano, Synergies between Corporate and Private Banking (2005). Banking for Family Business: A New Challenge for Wealth Management., Vol. , p. 89-113 2005. Available at SSRN: https://ssrn.com/abstract=1497263

Stefano Caselli (Contact Author)

Bocconi University - Department of Finance ( email )

Via Roentgen 1
Milano, MI 20136
Italy

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