Since the early 1980s, the U.S. banking industry has seen a strong trend toward consolidation, partly because of state regulatory changes permitting out-of-state bank acquisitions. There were 6,157 bank mergers and acquisitions (M&As) between 1981 and 1994 (Rhoades [1996]). Consolidation of this magnitude has brought significant changes to the banking sector that are in themselves worth investi...

To keep the head high in globalized economy one has to follow the path of growth, which contains various challenges and issues; one has to overpower these challenges and issues to become a success story. We consider a case of ICICI Bank Ltd., the largest private sector bank in India, which has acquired nine financial firms to make the steps of the ladder of success. Therefore, the aim of this a...

Compensation of bank CEOs increases after mergers, suggesting that executives may engage in acquisitions to enjoy size-related personal benefits (Bliss and Rosen, 2001). Alternatively, bank mergers can be viewed as the efficient assignation of merged assets to the managerial team best suited to realize merger gains. Theories of executive compensation based on managerial productivity and optimal...

We use changes in competition and supervisory controls of bank mergers to analyze the impact of announcements of changes in financial laws on the stock prices of banks and non-financial firms. Covering nineteen industrialized countries for the period 1987 to 2004 we find that banks’ stock prices increase with enhanced competition control, whereas those of non-financial firms decrease. Bank stoc...

Using a unique Norwegian dataset, which combines information on companies’ bank accounts, annual accounts, bankruptcies, and bank mergers and acquisitions (M&As), we find that such M&As increase interest rate margins for nontransparent small and medium sized firms. There is little effect for more transparent companies. Since, due to information asymmetries, nontransparent firms are typically mo...

Introduction Until quite recently, industrial-organization economists, bank regulators, and the Justice Department shared the view that market structure, that is, the number and size distribution of competitors in a market, is the primary determinant of the conduct and performance of banks operating in that market. More particularly, the traditional structuralist view is that the greater the sh...