21-18 The safety and soundness of a holding company that has both a bank subsidiary and a securities affiliate can be enhanced over time by the product diversification benefits of a more stable earnings stream caused by having well-diversified financial services.

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Having a well-diversified financial services portfolio can lead to a more stable earnings stream and therefore enhance the safety and soundness of a holding company that has both a bank subsidiary and a securities affiliate. This is because unexpected losses in one area of the portfolio can be offset by gains in another area.

21-18 the Safety and Soundness of a Holding Company That