Bank Deregulation, Consolidation and Stability: Evidence on U.S. M&amp;A Centric Activity

Aziz, Saqib; Lilti, Jean-Jacques

doi:10.3917/fina.381.0085

Finance

2017

DOI: 10.3917/fina.381.0085

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Bank Deregulation, Consolidation and Stability: Evidence on U.S. M&A Centric Activity

Saqib Aziz

Jean-Jacques Lilti

Abstract: En utilisant la méthode des doubles différences sur un échantillon de 3 447 fusions-acquisitions (F&A) américaines de 1990 à 2009, nous examinons les relations entre la déréglementation bancaire américaine, la stabilité bancaire et la consolidation via ces processus de rapprochements. Dans l’ensemble, la consolidation liée aux fusions-acquisitions aux États-Unis est positivement liée à la déréglementation bancaire, même si les effets individuels des actes de déréglementation visant à favoriser la diversité… Show more

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Cited by 3 publications

References 37 publications

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Does banking consolidation improve bank stability? Evidence from Sub-Saharan Africa

Ayagre,

Sarpong-Kumankoma,

Aboagye

et al. 2024

JFRC

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Purpose This study aims to investigate the influence of banking consolidations on bank stability in Sub-Saharan African (SSA) countries for the period 2003–2019, following a series of bank mergers and acquisitions (M&As) in the region and whether regulation-induced bank M&As affect banking sector stability. Design/methodology/approach The fixed effect panel regression model is used to understand the influence of regulation-induced and voluntary bank mergers and acquisitions on banking stability in SSA. The study also controlled for bank-specific factors, market concentration and macroeconomic variables that affect banking stability. The study used three measures of bank stability: the Z-score, risk-adjusted return on assets and risk-adjusted bank capital. Findings The study results reveal that voluntary bank M&As, market concentration, net interest margin, bank capital, bank deposits and income diversification influence banking sector stability positively. However, the findings show that regulation-induced bank mergers and acquisitions impact banking stability negatively. Where bank M&As were a result of banking regulatory reforms, called regulation-induced mergers and acquisitions (RIM&As), banking stability suffered, but voluntary bank M&As improved banking stability. Again, the study supports the concentration–stability argument w?>rather than the competition–stability hypothesis. Therefore, more concentrated banking markets in SSA countries have more stable banks and fewer risks of system-wide bank failures. Other factors influencing banking stability in SSA are return on equity, bank efficiency (cost-to-income), bank size and deposits-to-assets ratio. However, their relationship is negative with the stability of the banking sector. Practical implications The findings imply that the regulatory authorities should encourage voluntary bank M&As and not regulation-induced bank M&As to improve the stability of the banking systems in SSA. Originality/value The study provides new evidence on the effects of regulation-induced bank M&As on the stability of banks.

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Does banking consolidation improve bank stability? Evidence from Sub-Saharan Africa

Ayagre,

Sarpong-Kumankoma,

Aboagye

et al. 2024

JFRC

View full text Add to dashboard Cite

show abstract

Consolidation Processes in the Banking Sector

Tereškinaitė,

Vasiliauskaitė

2023

Science - Future of Lithuania

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The process of globalization in the banking sector has been an integral part of international economic and financial relations over the last few decades and has been growing rapidly ever since. Globalization offers opportunities for various integration processes in the regions, one of which is the consolidation process. Mergers and acquisitions banking is one of the means for banks to consolidate their processes, to manage their resources more efficiently, to gain a more competitive advantage and increase their profits by entering foreign capital markets. The ongoing consolidation processes in the banking sector are affecting economic growth and stability, and with the constant changes of the global economic climate, the banking sector is adapting, hence it is important to assess the factors behind the consolidation process and identify further developments in bank consolidation. In the article the following tasks were to be accomplished: 1) based on the analysis of the scientific literature, to identify the factors and reasons that promote the consolidation process, the execution of mergers and acquisitions in a global environment; 2) to perform a comparative analysis of the ratio of the share price and the value of tangible assets of banks of different regions engaged in mergers and acquisitions; 3) after evaluating the results of the comparative analysis, indicate further directions for mergers and acquisitions in different regions. After accomplishing the specified tasks, the most important factors were identified, which were attributed to internal and external motives, and the possibilities for consolidation processes in the banking regions were presented. The following research methods are used in the article – analysis of scientific literature, comparative analysis, analysis and evaluation of financial statements.

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Effects of Agricultural Investments on Poverty in Rural Areas of Congo

Owonda

2024

AJIBM

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This paper analyzes the effects of agricultural investment on poverty in rural areas Congo over the period 1989 to 2019, focusing on a monetary approach (income or consumption expenditure). The results obtained from this study through the Autoregressive Lagged Model (ARDL) showed that agricultural investment has a positive and significant influence on poverty in the short and long term in Congo. As in most developing countries, the majority of the population lives in rural areas, and derives its income from agricultural activities. For this reason, the development of agricultural investment could be one of the essential ways of eradicating poverty in rural areas.

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Bank Deregulation, Consolidation and Stability: Evidence on U.S. M&A Centric Activity

Cited by 3 publications

References 37 publications

Does banking consolidation improve bank stability? Evidence from Sub-Saharan Africa

Does banking consolidation improve bank stability? Evidence from Sub-Saharan Africa

Consolidation Processes in the Banking Sector

Effects of Agricultural Investments on Poverty in Rural Areas of Congo

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