Branching Deregulation and Merger Optimality

The U.S. banking industry has been characterized by intense merger activity in the absence of economies of scale and scope. We claim that the loosening of geographic constraints on U.S. banks is responsible for this consolidation process, irrespective of value-maximizing motives. We demonstrate this by putting forward a theoretical model of banking competition and studying banks’ strategic responses to geographic deregulation. We show that even in the absence of economies of scale and scope, bank mergers represent an optimal response. Also, we show that the consolidation process is characterized by merger waves and that some equilibrium mergers are not profitable per se -they yield losses- but become profitable as the waves of mergers unfold.Banking Competition, Deregulation, Mergers

Whom to Merge with? A Tale of the Spanish Banking Deregulation Process

We put forward a simple spatial competition model to study banks’ strategic responses to the Spanish asymmetric geographic deregulation. We find that once geographic deregulation process finishes, inter-regional mergers between the savings banks are optimal. We claim that the public good nature of the merging activities together with the incentives provided by the deregulation process are the driving factors behind the equilibrium merger of the savings banks. It seems that the economic crisis will finally force regional politicians to allow inter-regional caja mergers, letting the consequences of the removal of geographic barriers in the 80’s come to a fruition with a delay of thirty years.Banking Competition, Deregulation, Mergers

The Effects of Deregulation on the Performance of Financial Institutions: The Case of Spanish Savings Banks

This paper examines the impact of regulatory reform on the performance of Spanish savings banks. To this end it uses panel data for the period 1986-1995 and a flexible variable profit function that incorporates time-varying technical efficiency. The focus is whether increased competition brought on by deregulation affected performance of banks over time. Bank performance, measured by the percentage change in profitability, ceteris paribus, is decomposed into technical change and change in technical efficiency both of which are defined in terms of the profit function. We also examine output technical efficiency, which is defined in terms of the production possibility frontier. Several alternative models with different specifications of technical efficiency are used to check robustness of the results. Empirical results show declining levels of output technical efficiency along with a significantly high rate of technical progress. In spite of declining technical efficiency during this period, we find evidence of an increasing trend in productivity growth

The Effects of Deregulation on the Performance of Financial Institutions: The Case of Spanish Savings Banks

This paper examines the impact of regulatory reform on the performance of Spanish savings banks. To this end it uses panel data for the period 1986-1995 and a flexible variable profit function that incorporates time-varying technical efficiency. The focus is whether increased competition brought on by deregulation affected performance of banks over time. Bank performance, measured by the percentage change in profitability, ceteris paribus, is decomposed into technical change and change in technical efficiency both of which are defined in terms of the profit function. We also examine output technical efficiency, which is defined in terms of the production possibility frontier. Several alternative models with different specifications of technical efficiency are used to check robustness of the results. Empirical results show declining levels of output technical efficiency along with a significantly high rate of technical progress. In spite of declining technical efficiency during this period, we find evidence of an increasing trend in productivity growth

Early lung cancer detection using spiral computed tomography and positron emission tomography

RATIONALE: Lung cancer screening using computed tomography (CT) is effective in detecting lung cancer in early stages. Concerns regarding false-positive rates and unnecessary invasive procedures have been raised. OBJECTIVE: To study the efficiency of a lung cancer protocol using spiral CT and F-18-fluorodeoxyglucose positron emission tomography (FDG-PET). METHODS: High-risk individuals underwent screening with annual spiral CTs. Follow-up CTs were done for noncalcified nodules of 5 mm or greater, and FDG-PET was done for nodules 10 mm or larger or smaller (> 7 mm), growing nodules. RESULTS: A total of 911 individuals completed a baseline CT study and 424 had at least one annual follow-up study. Of the former, 14% had noncalcified nodules of 5 mm or larger, and 3.6% had nodules of 10 mm or larger. Eleven non-small cell lung cancers (NSCLC) and one small cell lung cancer (SCLC) were diagnosed in the baseline study (prevalence rate, 1.32%), and two NSCLCs in the annual study (incidence rate, 0.47%). All NSCLCs (92% of prevalence cancers) were diagnosed in stage I (12 stage IA, 1 stage IB). FDG-PET was helpful for the correct diagnosis in 19 of 25 indeterminate nodules. The sensitivity, specificity, positive predictive value, and negative predictive value of FDG-PET for the diagnosis of malignancy were 69, 91, 90, and 71%, respectively. However, the sensitivity and negative predictive value of the screening algorithm, which included a 3-month follow-up CT for nodules with a negative FDG-PET, was 100%. CONCLUSION: A protocol for early lung cancer detection using spiral CT and FDG-PET is useful and may minimize unnecessary invasive procedures for benign lesions