Is there a diversification discount in financial conglomerates?

"This paper investigates whether the diversity of activities conducted by financial institutions influences their market valuations. We find that there is a diversification discount: The marketvalues financial conglomerates that engage in multiple activities, e.g., lending and non-lending financial services,lower than if those financial conglomerates were broken into financial intermediaries that specialize in the individual activities. While difficult to identify a single causalfactor, the results are consistent with theories that stress intensified agency problems infinancial conglomerates that engage in multiple activities and indicate that economies of scope arenot sufficiently large to produce a diversification premium"--National Bureau of Economic Research web site.