Incentives for Banking Megamergers: What Motives Might Regulators Infer from Event-Study Evidence?

By Edward J. Kane. 2000

260 citations recorded by the source corpus.

Subfields: Accounting, Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/f07bef75844cf74352784e141e55d614ad6c84ed

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

In Economics and Econometrics

In Finance

Citations in the corpus

Subordinated Debt and Bank Capital Reform (2000, unknown): “Kane (2000) and Penas and Unal (2000) also question whether too-big-to-fail, and the resulting implicit guarantees, is exclusively a policy of the past.”
Consolidation in the U.S. Banking Industry: Is the Long, Strange Trip About to End? (2005, unknown): “26 Support for the too-big-to-fail motive is found in Shull and Hanweck (2001), Penas and Unal (2004), and Kane (2000).”
Bank Market Power, Economic Growth and Financial Stability: Evidence from Asian Banks (2011, background): “Bank size can also be a major factor of higher risk taking due to “too big to fail” effects in larger banks (Kane, 2000; Mishkin, 2006).”
Performance Changes Around Bank Mergers: Revenue Enhancements versus Cost Reductions (2006, background): “…of mergers across the 11 years does not appear to be affecting the results.16 Because earlier literature (e.g., Cornett and Tehranian 1992 and Kane 2000) often focused on the performance of large banks around a merger, we split the sample into two groups based on the asset size of the bidder…”
Banks without Parachutes – Competitive Effects of Government Bail-out Policies (2010, unknown): “…literature looks at the question whether the prospect of becoming TBTF is a motivation for bank mergers.14 While Benston, Hunter, and Wall (1995) reject this hypothesis for the years 1981 to 1986, the evidence for the 1990s in Kane (2000) and Penas and Unal (2001) is consistent with the hypothesis.”
How Much Did Banks Pay to Become Too-Big-To-Fail and to Become Systemically Important? (2009, unknown): “Kane (2000) describes these large banks as being “too-big-to-unwind” or “too-big-to-discipline-adequately (TBTDA),” suggesting that these banking organizations would be more likely to receive favorable treatment by both the market and regulators during a financial crisis.”
The Effects of Cross-Border Bank Mergers on Bank Risk and Value (2002, unknown): “Moreover, in the case of banks, investors will rationally assign value to any mis- (under-) priced safety net guarantees (see Kane, 2000).”
M&As Performance in the European Financial Industry (2006, unknown): “Kane (2000) finds that mergers are likely to generate value when the target bank is a large deposit institution, and when both firms are headquartered in the same US state, indicating potential for increases in market penetration.”
When the Cat's Away the Mice will Play: Does Regulation at Home Affect Bank Risk Taking Abroad? (2013, unknown): “…crisis on poor regulation and supervision, resulting in excessive risk taking prior to the crisis.1 Second, financial institutions tend to shift poorly monitored risk exposures to taxpayers in markets where safety net benefits are greater (Kane, 2000; Carbo, Kane, and Rodriguez-Fernandez, 2009).”
Bank competition, crisis and risk taking: Evidence from emerging markets in Asia (2013, unknown): “Kane (2000) also finds that acquiring stockholders in US bank „megamergers‟ experienced positive abnormal returns, highlighting that consolidation opens access to greater market power that increases profitability.”
The End of Market Discipline? Investor Expectations of Implicit State Guarantees (2013, background): “Studies report that mergers undertaken by the largest banks increase market value for shareholders, while this is not the case for smaller banks, suggesting market prices reflect safety net subsidies for TBTF banks (e.g., Kane 2000).”