Bank mergers, competition and liquidity
We model the impact of bank mergers on loan competition, reserve holdings and aggregate liquidity. A merger changes the distribution of liquidity shocks and creates an internal money market, leading to financial cost efficiencies and more precise estimates of liquidity needs. The merged banks may increase their reserve holdings through an internalization effect or decrease them because of a diversification effect. The merger also affects loan market competition, which in turn modifies the distribution of bank sizes and aggregate liquidity needs. Mergers among large banks tend to increase aggregate liquidity needs and thus the public provision of liquidity through monetary operations of the central bank. Klassifikation: D43, G21, G28, L13
| Author: | Elena Carletti, Philipp Hartmann, Giancarlo Spagnolo |
|---|---|
| URN: | urn:nbn:de:hebis:30-25993 |
| Series (Serial Number) | CFS working paper series (2006, 08) |
| Document Type: | Working Paper |
| Language: | English |
| Date of Publication (online): | 04.05.2006 |
| Year of first Publication: | 2006 |
| Publishing Institution: | Univ.-Bibliothek Frankfurt am Main |
| Tag: | bank seserves ; banking system liquidity ; credit market competition ; internal money market ; monetary operations |
| Source: | CFS working paper ; 2006, 08 , forthcoming in the "Journal of Money, Credit and Banking" |
| HeBIS PPN: | 190329904 |
| Institutes: | Center for Financial Studies (CFS) |
| Dewey Decimal Classification: | 330 Wirtschaft |
| Sammlungen: | Universitätspublikationen |
| Licence (German): |  Veröffentlichungsvertrag für Publikationen ohne Print on Demand |
