Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/331954 
Year of Publication: 
2025
Citation: 
[Journal:] German Economic Review (GER) [ISSN:] 1468-0475 [Volume:] 26 [Issue:] 3 [Year:] 2025 [Pages:] 193-227
Publisher: 
De Gruyter, Berlin
Abstract: 
Motivated by the recent increase in bank mergers, this paper examines the performance of German cooperative banks that merged between 2014 and 2019. We are particularly interested in whether elevated merger rates are due to bank inefficiencies or to challenging policy measures such as low-for-long interest rates. The results indicate that banks that perform relatively worse before and during the low interest environment exhibit a greater probability of becoming a target during this period. Consolidation generally occurs among low performing banks where large and well-capitalized banks merge with their small and inefficient peers. Ultimately, our results attribute the increased number of mergers to inefficiencies in the banking industry, as banks that exited the market were inefficient prior to the adverse low interest rate environment.
Subjects: 
banks
efficiency
low interest environment
mergers
regulation
JEL: 
G21
G34
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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