The safety and soundness effects of Bank M&;A in the EU: Does prudential regulation have any impact?

Jens Hagendorff, Maria J. Nieto

Research output: Contribution to journalArticlepeer-review

Abstract / Description of output

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.
Original languageEnglish
Pages (from-to)462-490
Number of pages29
JournalEuropean Financial Management
Volume21
Issue number3
Early online date13 Jun 2013
DOIs
Publication statusPublished - 13 Jun 2013

Keywords / Materials (for Non-textual outputs)

  • banks
  • Europe
  • mergers

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