102 research outputs found
Mergers and acquisitions and bank performance in Europe: the role of strategic similarities
An unprecedented process of financial consolidation has taken place in the European Union over the past decade. Building on earlier US evidence, we examine the impact of strategic similarities between bidders and targets on post-merger financial performance. We find that, on average, bank mergers in the European Union resulted in improved return on capital. By making the assumption that balance-sheet resource allocation is indicative of the strategic focus of banks, we also find significantly different results for domestic and cross-border mergers. For domestic deals, it could be quite costly to integrate dissimilar institutions in terms of their loan, earnings, cost, deposits and size strategies. For cross-border mergers and acquisitions (M&As), differences of merging partners in their loan and credit risk strategies are conducive to a higher performance whereas diversity in their capital, cost structure as well as technology and innovation investments strategies are counterproductive from a performance standpoint. JEL Classification: G21, G34banks, M&As, strategic similarities
Securitisation and the bank lending channel
The dramatic increase in securitisation activity has modified the functioning of credit markets by reducing the fundamental role of liquidity transformation performed by financial intermediaries. We claim that the changing role of banks from Ăâoriginate and holdĂâ to Ăâoriginate, repackage and sellĂâ has also modified banksĂâ abilities to grant credit and the effectiveness of the bank lending channel of monetary policy. Using a large sample of European banks, we find that the use of securitisation appears to shelter banksĂâ loan supply from the effects of monetary policy. Securitisation activity has also strengthened the capacity of banks to supply new loans but this capacity depends upon business cycle conditions as well as upon banksĂâ risk positions. In this respect the recent experience of the sub-prime mortgage loans crisis is very instructive.asset securitisation, bank lending channel, monetary policy
KAUZALNOST IZMEÄU POTROĆ NJE ENERGIJE I GOSPODARSKOG RASTA U UJEDINJENOM KRALJEVSTVU
This study aims to examine the relationship between the energy consumption (EC) and
economic growth (GDP) in the United Kingdom during the period between 1987 and 2007.
Augmented Dickey-Fuller (ADF) and Philips-Perron (PP) unit root tests, the Johansen Cointegration
test and standard Granger causality test were applied to examine the relationship between EC and
GDP. Since the analysis results indicated no cointegration relationship between the variables of EC
and GDP, it was found that there is no long-term relationship between the variables; however, in the
short run, there is a unidirectional causality relationship from GDP to EC.Rad istraĆŸuje odnos izmeÄu potroĆĄnje energije (EC) i gospodarskog rasta (GDP) u
Ujedinjenom Kraljevstvu tijekom perioda od 1987. i 2007. ProĆĄireni Dickey-Fuller (ADF) i
Philips-Peron (PP) testovi jediniÄnog korijena, Johansenov kointegracijski test i standardni
Grangerov test kauzalnosti primijenjeni su kako bi se ispitao odnos izmeÄu EC i GDP.
ZakljuÄeno je da ne postoji dugoroÄan odnos izmeÄu varijabli; ipak, kratkoroÄno postoji
jednosmjerna kauzalna veza od GDP-a prema EC
Does monetary policy affect bank risk-taking?
This paper investigates the relationship between short-term interest rates and bank risk. Using a unique database that includes quarterly balance sheet information for listed banks operating in the European Union and the United States in the last decade, we find evidence that unusually low interest rates over an extended period of time contributed to an increase in banks' risk. This result holds for a wide range of measures of risk, as well as macroeconomic and institutional controls. JEL Classification: E44, E55, G21bank risk, credit crisis, monetary policy
Bank risk and monetary policy
We find evidence of a bank lending channel for the euro area operating via bank risk. Financial innovation and the new ways to transfer credit risk have tended to diminish the informational content of standard bank balance-sheet indicators. We show that bank risk conditions, as perceived by financial market investors, need to be considered, together with the other indicators (i.e. size, liquidity and capitalization), traditionally used in the bank lending channel literature to assess a bankâs ability and willingness to supply new loans. Using a large sample of European banks, we find that banks characterized by lower expected default frequency are able to offer a larger amount of credit and to better insulate their loan supply from monetary policy changes. JEL Classification: E44, E55bank, bank lending channel, monetary policy, risk
Large debt financing: syndicated loans versus corporate bonds
Following the introduction of the euro, the markets for large debt financing experienced a historical expansion. We investigate the financial factors behind the issuance of syndicated loans for an extensive sample of euro area non-financial corporations. For the first time we compare these factors to those of its major competitor: the corporate bond market. We find that large firms, with greater financial leverage, more (verifiable) profits and higher liquidation values tend to prefer syndicated loans. In contrast, firms with larger levels of short-term debt and those perceived by markets as having more growth opportunities favour financing through corporate bonds. JEL Classification: D40, F30, G21corporate bonds, debt choice, syndicated loans, the euro
Finance and income inequality revisited
In a panel of 121 developed and developing economies, financial development promotes income equality in upper-middle income countries and inequality in low- and high-income countries. Finance impacts on income inequality through both the financial institutions and financial markets channels, though the impact of the financial institutions channel is relatively larger
Securitisation and the bank lending channel
The dramatic increase in securitisation activity has odified the functioning of credit markets by reducing the fundamental role of liquidity transformation performed by financial intermediaries. We claim that the changing role of banks from âoriginate and holdâ to âoriginate, repackage and sellâ has also modified banksâ abilities to grant credit and the effectiveness of the bank lending channel of monetary policy. Using a large sample of European banks, we find that the use of securitisation appears to shelter banksâ loan supply from the effects of monetary policy. Securitisation activity has also strengthened the capacity of banks to supply new loans but this capacity depends upon business cycle conditions and, notably, upon banksâ risk positions. In this respect, the recent experience of the sub-prime mortgage loans crisis is very instructive. JEL Classification: E44, E55asset securitisation, bank lending channel, monetary policy
Bank risk and monetary policy
We find evidence of a bank lending channel for the euro area operating via bank risk. Financial innovation and the new ways to transfer credit risk have tended to diminish the informational content of standard bank balance-sheet indicators. We show that bank risk conditions, as perceived by financial market investors, need to be considered, together with the other indicators (i.e. size, liquidity and capitalization), traditionally used in the bank lending channel literature to assess a bankĂâs ability and willingness to supply new loans. Using a large sample of European banks, we find that banks characterized by lower expected default frequency are able to offer a larger amount of credit and to better insulate their loan supply from monetary policy changes.Bank, Risk, Bank Lending Channel, Monetary Policy
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