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http://hdl.handle.net/10419/19742
  
Title:Accounting for distress in bank mergers PDF Logo
Authors:Koetter, Michael
Bos, Jaap W. B.
Heid, Frank
Kool, Clemens J. M.
Kolari, James W.
Porath, Daniel
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.
Subjects:Mergers
bailout
X-efficiency
multinomial logit
JEL:G21
G14
G34
Document Type:Working Paper
Appears in Collections:Discussion Paper Series 2: Banking and Financial Studies, Deutsche Bundesbank

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