Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82498
Authors: 
Carletti, Elena
Hartmann, Philipp
Spagnolo, Giancarlo
Year of Publication: 
2005
Series/Report no.: 
Sveriges Riksbank Working Paper Series 182
Abstract: 
We model the impact of bank mergers on loan competition, reserve holdings and aggregate liquidity. A merger creates an internal money market that affects reserve holdings and induces financial cost advantages, but also withdraws liquidity from the interbank market. Loan market competition modifies the heterogeneity in the size of banks, thus affecting aggregate liquidity. Mergers among large banks tend to increase aggregate liquidity needs and thus the liquidity provision in monetary operations by the central bank.
Subjects: 
Credit market competition
bank reserves
internal money market
banking system liquidity
JEL: 
D43
G21
G28
L13
Document Type: 
Working Paper

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