The safety and soundness effects of bank M&A in the EU: does prudential regulation have any impact?

Hagendorff, Jens ORCID: https://orcid.org/0000-0002-3567-7826 and Nieto, Maria J. 2015. The safety and soundness effects of bank M&A in the EU: does prudential regulation have any impact? European Financial Management 21 (3) , pp. 462-490. 10.1111/j.1468-036X.2013.12022.x

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Abstract

This paper studies the impact of European bank mergers on changes in key safety and soundness measures of both acquirers and targets. We find that acquirers in cross‐border deals tend to perform better when their home country prudential supervisors and deposit insurance funding systems are stricter than that of the target. For target banks, we find that stronger supervision and tougher deposit insurance funding regimes result in positive post merger changes in liquidity and performance. Overall, while bank mergers have undermined bank safety and soundness in some cases, our evidence indicates that strong regulation and supervision can partly ameliorate this.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Additional Information:	Published online 13 June 2015
Publisher:	Wiley:
ISSN:	1354-7798
Last Modified:	28 Oct 2022 10:03
URI:	https://orca.cardiff.ac.uk/id/eprint/76564

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