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Discussion Paper Series 2: Banking and Financial Studies, Deutsche Bundesbank >
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|Title:||Accounting for distress in bank mergers |
Bos, Jaap W. B.
Kool, Clemens J. M.
Kolari, James W.
|Issue Date:||2005 |
|Series/Report no.:||Discussion Paper, Series 2: Banking and Financial Supervision 2005,09|
|Abstract:||The inability of most bank merger studies to control for hidden bailouts may lead to biased results. In this study, we employ a unique data set of approximately 1,000 mergers to analyze the determinants of bank mergers. We use data on the regulatory intervention history to distinguish between distressed and non-distressed mergers. We find that, among merging banks, distressed banks had the worst profiles and acquirers perform somewhat better than targets. However, both distressed and non-distressed mergers have worse CAMEL profiles than our control group. In fact, non-distressed mergers may be motivated by the desire to forestall serious future financial distress and prevent regulatory intervention.|
|Document Type:||Working Paper|
|Appears in Collections:||Discussion Paper Series 2: Banking and Financial Studies, Deutsche Bundesbank|
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