How has financial modernization affected corporate customers?

"Previous studies of the announcement effects of relaxing administrative and legislative restraints show that signal events leading up to the enactment of the Financial Services Modernization Act (FSMA) increased the prices of financial-institution stocks. An unsettled question is whether the gains observed for these stocks arise from projected increases in efficiency or from reductions in customer bargaining power. This paper documents that some of the value increase came at the expense of potential and actual customers. The stock prices of credit-constrained customers declined during FSMA event windows and experienced significant increases in beta in the wake of its enactment. These findings reinforce evidence in the literature on bank mergers that large-bank consolidation is unfavorably affecting the availability of credit for capital-constrained firms"--National Bureau of Economic Research web site.