Download or read book Bank Mergers and the Dynamics of Deposit Interest Rates written by Ben R. Craig and published by . This book was released on 2016 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: Despite extensive research interest in the last decade, the banking literature has not reached a consensus on the impact of bank mergers on deposit rates. In particular, results on the dynamics of deposit rates surrounding bank mergers vary substantially across studies. In this paper, we aim for a comprehensive empirical analysis of a bank merger's impact on deposit rate dynamics. We base the analysis on a unique dataset comprising deposit rates of 624 US banks with a monthly frequency for the time period 1997-2006. These data are matched with individual bank and local market characteristics and the complete list of bank mergers in the US. The data allow us to track the dynamics of bank mergers while controlling for the rigidity of the deposit rates and for a range of merger, bank and local market features. An innovation of our work is the introduction of an econometric approach of estimating the change of the deposit rates given their rigidity.
Download or read book Market Concentration and Uniform Pricing written by João Granja and published by . This book was released on 2021 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: "We show that U.S. banks price deposits almost uniformly across their branches and that this pricing practice is crucial to explain the deposit rate dynamics following bank mergers. We find a strong and sharp post-merger convergence between the deposit rates of the acquired branches and the median deposit rate of the acquirer. This pattern is almost fully explained by adjustments in the deposit rates of the acquired branches, irrespective of whether their rates were above or below those practiced by the acquirer. Acquired branches lose deposits and local market share, especially when they decrease their rates due to uniform pricing. Local competitors respond to changes in deposit rates at the acquired branches by adjusting their own deposit rates in the same direction. We find that pre-merger differences in deposit rates between merged entities explain more of the post-merger evolution of deposit rates than the predicted changes in local market concentration induced by the merger. This result indicates that competition authorities would be well advised to review the potential impact of premerger pricing differences in evaluating a merger within an industry with strong uniform pricing practices"--Abstract, page ii.
Download or read book Are Mergers Beneficial to Consumers written by Dario Focarelli and published by . This book was released on 2002 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Bank Mergers written by and published by . This book was released on 1962 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Bank Mergers written by C.J. Devine Institute of Finance and published by . This book was released on 1962 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Looking Back with Interest Rates written by Joshua Lee Palmer and published by . This book was released on 2011 with total page 128 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the following three essays I use quantitative evidence to address the effectiveness of horizontal merger policy in the United States in protecting the competitive balance of markets. Since the enactment of the Sherman Antitrust Act in 1890, the Federal Government has attempted to protect the public from increased prices, reduced innovation, and other adverse effects that may occur when firms are able to exercise market power. Horizontal mergers, in which firms that were previously direct competitors combine to operate as a single entity, are of particular concern to the Antitrust Authorities (mainly the Department of Justice and the Federal Trade Commission) as these mergers necessarily remove a competitor from the market. Surprisingly, there are relatively few empirical studies that investigate whether the Antitrust Authorities are able to accurately identify the potentially anticompetitive mergers, or whether once identified, the proposed remedies are appropriate to alleviate concerns over gains in market power. I provide empirical work on these two issues. In the first essay, I consider the question of how the antitrust agencies identify potentially troublesome mergers based on pre-merger information. I use pre-merger data from the commercial banking industry to implement a model proposed in the literature to be an improvement over the current merger application screening tool. I find that relative to the current screen the proposed model reduced the number of mergers flagged as being competitively troublesome. This result is important given the time and resource constraints that antitrust agencies face when evaluating merger applications. To test whether the proposed model was not to lax, I combine pre- and post-merger data and implement a difference-in-differences method to estimate the actual merger affects. I then check to see whether mergers estimated to have resulted in price effects were identified by the proposed model and find that all of the mergers estimated to have resulted in statistically significant price increases were flagged by the proposed model. In my second essay, I turn to the question of whether branch divestitures are sufficient market power remedies in bank mergers. In particular, I combine data on pre- and post-merger market conditions with data on the Federal Reserve Board's (FRB) stated post-merger expectations to investigate how well divestiture remedies alleviate market power concerns. I identify mergers that involved the divestitures of bank branches in at least one of the banking markets in which the merging banks competed prior to the merger. I then divide the sample of merger markets into two subsamples, one in which divestitures occurred and one in which no divestitures occurred and compare the interest rates banks paid depositors in divestiture markets to the rates paid to depositors in non-divestiture markets. I find that in the second year after the merger the interest rate spread between divestiture and non-divestiture markets was over 135 percent larger on deposit accounts than the pre-merger spread and remained almost 40% higher in the third year following the merger. As a result, depositors in divestiture markets were relatively worse off than depositors in non-divestiture markets following the merger. This evidence suggests that the divestitures may not have been sufficient market power remedies. In the final chapter I address a troubling aspect of antitrust policy. Namely, despite its long history and recognized importance, a deficiency of the empirical evidence required to accurately assess the effectiveness of antitrust policy has persisted. I identify publicly available data sets on pre- and post-merger market data, as well as publicly available data on specific post-merger market predictions made by the Federal Reserve Board at the time of the merger application review that can be collected to address this deficiency. I then check to see how the FRB's pro forma estimates of the post-merger market shares underlying their review process compare to the post-merger market shares observed in the data. I find that pro forma market shares consistently overestimate the post-merger market share of the surviving bank, a finding that is troublesome to the extent that it reflects a restriction in output by the merged bank. I conclude that the findings reaffirm the warnings from a number of economists that assumptions underlying merger policy need to be analyzed and argue that the availability of data useful for such analyses should be viewed by the profession and policy makers as rendering the deficiency of empirical evidence on antitrust policy as irresponsible and unacceptable.
Download or read book Bank Mergers Acquisitions written by Yakov Amihud and published by Springer Science & Business Media. This book was released on 2013-04-17 with total page 249 pages. Available in PDF, EPUB and Kindle. Book excerpt: As the financial services industry becomes increasingly international, the more narrowly defined and historically protected national financial markets become less significant. Consequently, financial institutions must achieve a critical size in order to compete. Bank Mergers & Acquisitions analyses the major issues associated with the large wave of bank mergers and acquisitions in the 1990's. While the effects of these changes have been most pronounced in the commercial banking industry, they also have a profound impact on other financial institutions: insurance firms, investment banks, and institutional investors. Bank Mergers & Acquisitions is divided into three major sections: A general and theoretical background to the topic of bank mergers and acquisitions; the effect of bank mergers on efficiency and shareholders' wealth; and regulatory and legal issues associated with mergers of financial institutions. It brings together contributions from leading scholars and high-level practitioners in economics, finance and law.
Download or read book The Oxford Handbook of Banking written by Allen N. Berger and published by . This book was released on 2015 with total page 1105 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Oxford Handbook of Banking, Second Edition provides an overview and analysis of developments and research in banking written by leading researchers in the field. This handbook will appeal to graduate students of economics, banking and finance, academics, practitioners, regulators, and policy makers. Consequently, the book strikes a balance between abstract theory, empirical analysis, and practitioner, and policy-related material. The Handbook is split into five parts. Part I, The Theory of Banking, examines the role of banks in the wider financial system, why banks exist, how they function, and their corporate governance and risk management practices. Part II deals with Bank Operations and Performance. A range of issues are covered including bank performance, financial innovation, and technological change. Aspects relating to small business, consumer, and mortgage lending are analysed together with securitization, shadow banking, and payment systems. Part III entitled Regulatory and Policy Perspectives discusses central banking, monetary policy transmission, market discipline, and prudential regulation and supervision. Part IV of the book covers various Macroeconomic Perspectives in Banking. This part includes a discussion of systemic risk and banking and sovereign crises, the role of the state in finance and development as well as how banks influence real economic activity. The final Part V examines International Differences in Banking Structures and Environments. This part of the Handbook examines banking systems in the United States, European Union, Japan, Africa, Transition countries, and the developing nations of Asia and Latin America.
Download or read book The Industrial Organization of Banking written by David VanHoose and published by Springer. This book was released on 2017-05-08 with total page 310 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book aims to provide a thoroughly updated overview and evaluation of the industrial organization of banking. It examines the interplay among bank behavior, market structure, and regulation from the perspective of a variety of public policy issues, including bank competition and risk, market discipline, antitrust issues, and capital regulation. New to this edition are discussions of the economic foundations of international banking, macroprudential regulation, and international coordination of banking policies. The book can serve as a learning tool and reference for graduate students, academics, bankers, and policymakers with interests in the industrial organization of the banking sector and the impacts of banking regulations.
Download or read book Financial Services Firms written by Zabihollah Rezaee and published by John Wiley & Sons. This book was released on 2011-06-09 with total page 490 pages. Available in PDF, EPUB and Kindle. Book excerpt: Indispensable coverage of new federal regulatory reforms and federal financial issues An essential guide covering new federal regulatory reforms and federal financial issues Financial Institutions, Valuations, Mergers and Acquisitions, Third Edition presents a new regulatory framework for financial institutions in the post-bailout era. Provides valuable guidance to assess risks, measure performance and conduct valuations processes to create shareholder value Covers the protection of other stakeholders, including customers, regulators, government, and consumers Offers an up-to-date understanding of financial institutions, their challenges, and their opportunities in the post-Sarbanes-Oxley era Over the past decade, substantial changes have taken place in the structure and range of products and services provided by the financial services industry. Get current coverage of these changes that have transformed both traditional organizations such as banks, thrifts, and insurance companies, as well as securities providers, asset management companies and financial holding companies with the up-to-the-minute coverage found in Financial Institutions, Valuations, Mergers and Acquisitions, Third Edition.
Download or read book The Federal Reserve System Purposes and Functions written by Board of Governors of the Federal Reserve System and published by . This book was released on 2002 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.
Download or read book Mergers and Productivity written by Steven N. Kaplan and published by University of Chicago Press. This book was released on 2007-12-01 with total page 350 pages. Available in PDF, EPUB and Kindle. Book excerpt: Mergers and Productivity offers probing analyses of high-profile mergers in a variety of industries. Focusing on specific acquisitions, it illustrates the remarkable range of contingencies involved in any merger attempt. The authors clearly establish each merger's presumed objectives and the potential costs and benefits of the acquisition, and place it within the context of the broader industry. Striking conclusions that emerge from these case studies are that merger and acquisition activities were associated with technological or regulatory shocks, and that a merger's success or failure was dependent upon the acquirer's thorough understanding of the target, its corporate culture, and its workforce and wage structures prior to acquisition. Sifting through a wealth of carefully gathered evidence, these papers capture the richness, the complexity, and the economic intangibles inherent in contemporary merger activity in a way that large-scale studies of mergers cannot.
Download or read book FDIC Quarterly written by and published by . This book was released on 2009 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Proceedings of a Conference on Bank Structure and Competition written by and published by . This book was released on 2008 with total page 524 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Competition and Stability in Banking written by Xavier Vives and published by Princeton University Press. This book was released on 2020-11-03 with total page 344 pages. Available in PDF, EPUB and Kindle. Book excerpt: A distinguished economist examines competition, regulation, and stability in today's global banks Does too much competition in banking hurt society? What policies can best protect and stabilize banking without stifling it? Institutional responses to such questions have evolved over time, from interventionist regulatory control after the Great Depression to the liberalization policies that started in the United States in the 1970s. The global financial crisis of 2007–2009, which originated from an oversupply of credit, once again raised questions about excessive banking competition and what should be done about it. Competition and Stability in Banking addresses the critical relationships between competition, regulation, and stability, and the implications of coordinating banking regulations with competition policies. Xavier Vives argues that while competition is not responsible for fragility in banking, there are trade-offs between competition and stability. Well-designed regulations would alleviate these trade-offs but not eliminate them, and the specificity of competition in banking should be accounted for. Vives argues that regulation and competition policy should be coordinated, with tighter prudential requirements in more competitive situations, but he also shows that supervisory and competition authorities should stand separate from each other, each pursuing its own objective. Vives reviews the theory and empirics of banking competition, drawing on up-to-date analysis that incorporates the characteristics of modern market-based banking, and he looks at regulation, competition policies, and crisis interventions in Europe and the United States, as well as in emerging economies. Focusing on why banking competition policies are necessary, Competition and Stability in Banking examines regulation's impact on the industry's efficiency and effectiveness.
Download or read book Banking in a Steady State of Low Growth and Interest Rates written by Qianying Chen and published by International Monetary Fund. This book was released on 2018-08-27 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: A prolonged low-interest-rate environment presents a significant challenge to banks and is likely to entail major changes to their business models over the long-run. Lower returns to maturity transformation in the face of flatter yield curves and an inability to offer deposit rates significantly below zero combine to compress bank earnings in this environment. Smaller, deposit-funded, less diversified banks are hurt most, increasing consolidation pressures and reach-for-yield incentives, presenting new financial stability challenges.To the extent that such an economic environment reflects a new, steady-state with lower equilibrium growth driven by population aging and slower productivity growth, lower credit demand is likely to drive banking toward provision of fee-based, utility services.
Download or read book Monthly Report written by and published by . This book was released on 2008 with total page 610 pages. Available in PDF, EPUB and Kindle. Book excerpt:
