Advanced Search
MyIDEAS: Login to save this paper or follow this series

Bank Consolidation, Internationalization and Conglomeration

Contents:

Author Info

  • Gianni De Nicoló
  • M. G. Zephirin
  • Philip F. Bartholomew
  • Jahanara Zaman
Registered author(s):

    Abstract

    This paper documents global trends in bank activity, consolidation, internationalization, and financial firm conglomeration, and explores the extent to which financial firm risk and systemic risk potential in banking are related to consolidation and conglomeration. We find that while there is a substantial upward trend in conglomeration globally, consolidation and internationalization exhibit uneven patterns across world regions. Trends in consolidation and conglomeration indicate increased risk profiles for large, conglomerate financial firms, and higher levels of systemic risk potential for more concentrated banking systems. We outline research directions aimed at explaining why bank consolidation and conglomeration do not necessarily yield either safer financial firms or more resilient banking systems.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=16607
    Download Restriction: no

    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 03/158.

    as in new window
    Length: 44
    Date of creation: 01 Jul 2003
    Date of revision:
    Handle: RePEc:imf:imfwpa:03/158

    Contact details of provider:
    Postal: International Monetary Fund, Washington, DC USA
    Phone: (202) 623-7000
    Fax: (202) 623-4661
    Email:
    Web page: http://www.imf.org/external/pubind.htm
    More information through EDIRC

    Order Information:
    Web: http://www.imf.org/external/pubs/pubs/ord_info.htm

    Related research

    Keywords: Financial risk; Banking; Banking systems; financial institutions; deposit money; banking system; banking industry; deposit money banks; foreign asset; financial services; bank assets; bank mergers; banking crises; bank consolidation; equity capital; financial system; return on assets; bank activity; bank risk; bank holding; moral hazard; bank for international settlements; banking markets; bank holding companies; banking system concentration; financial sector; bank ownership; deposit insurance; deposit growth; international financial statistics; assets of deposit money banks; banking distress; assets of deposit money; bank policy; financial systems; financial assets; derivative; banking assets; bank acquisitions; bank of england; financial markets; bank diversification; derivative instruments; banking institutions; banking industries; banking ? crises; banking firm; bank financing; retail banking; banking regulation; international capital; banking ? distress; bank loan; bank holding company; bank intermediation; banking crisis; financial intermediation; bank funding; banking system asset; equity market; stock market; bank deposits; banking system assets; financial deregulation; bank recapitalizations; currency crises; banks with assets; international finance; bank entry; financial conglomerates; banker; holding company; bank subsidiaries; interbank market; bank profitability; financial stability;

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Jean-Charles Rochet & Jean Tirole, 1996. "Interbank lending and systemic risk," Proceedings, Board of Governors of the Federal Reserve System (U.S.), Board of Governors of the Federal Reserve System (U.S.), pages 733-765.
    2. S. Mishkin, Frederic, 1999. "Financial consolidation: Dangers and opportunities," Journal of Banking & Finance, Elsevier, Elsevier, vol. 23(2-4), pages 675-691, February.
    3. Dean Amel & Colleen Barnes & Fabio Panetta & Carmelo Salleo, 2002. "Consolidation and efficiency in the financial sector: a review of the international evidence," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 464, Bank of Italy, Economic Research and International Relations Area.
    4. John H. Boyd & Mark Gertler, 1994. "The role of large banks in the recent U.S. banking crisis," Quarterly Review, Federal Reserve Bank of Minneapolis, Federal Reserve Bank of Minneapolis, issue Win, pages 2-21.
    5. Allen N. Berger & Rebecca S. Demsetz & Philip E. Strahan, 1998. "The consolidation of the financial services industry: causes, consequences, and implications for the future," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 1998-46, Board of Governors of the Federal Reserve System (U.S.).
    6. Allen N. Berger & Robert DeYoung & Hesna Genay & Gregory F. Udell, 2000. "Globalization of financial institutions: evidence from cross-border banking performance," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2000-04, Board of Governors of the Federal Reserve System (U.S.).
    7. Benston, George J & Hunter, William C & Wall, Larry D, 1995. "Motivations for Bank Mergers and Acquisitions: Enhancing the Deposit Insurance Put Option versus Earnings Diversification," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 27(3), pages 777-88, August.
    8. Schüler, Martin, 2002. "The threat of systemic risk in banking: evidence for Europe," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 02-21, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    9. Impavido, Gregorio & Musalem, Alberto R. & Tressel, Thierry, 2001. "Contractual savings institutions and banks'stability and efficiency," Policy Research Working Paper Series 2751, The World Bank.
    10. Stiroh, Kevin J, 2004. "Diversification in Banking: Is Noninterest Income the Answer?," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 36(5), pages 853-82, October.
    11. Dean Amel & Colleen Barnes & Fabio Panetta & Carmelo Salleo, 2002. "Consolidation and efficiency in the financial sector: a review of the international evidence," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2002-47, Board of Governors of the Federal Reserve System (U.S.).
    12. A. Sinan Cebenoyan & Philip E. Strahan, 2001. "Risk Management, Capital Structure and Lending at Banks," Center for Financial Institutions Working Papers, Wharton School Center for Financial Institutions, University of Pennsylvania 02-09, Wharton School Center for Financial Institutions, University of Pennsylvania.
    13. Buch, Claudia M. & DeLong, Gayle, 2004. "Cross-border bank mergers: What lures the rare animal?," Journal of Banking & Finance, Elsevier, Elsevier, vol. 28(9), pages 2077-2102, September.
    14. Musalem, Alberto R. & Impavido, Gregorio & Tressel, Thierry, 2001. "Contractual savings, capital markets, and firms'financing choices," Policy Research Working Paper Series 2612, The World Bank.
    15. Gregor Andrade & Mark Mitchell & Erik Stafford, 2001. "New Evidence and Perspectives on Mergers," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 15(2), pages 103-120, Spring.
    16. Claessens, Stijn & Klingebiel, Daniela & Schmukler, Sergio L., 2002. "Explaining the migration of stocks from exchanges in emerging economies to international centers," Policy Research Working Paper Series 2816, The World Bank.
    17. Joseph G. Haubrich, 1998. "Bank diversification: laws and fallacies of large numbers," Economic Review, Federal Reserve Bank of Cleveland, Federal Reserve Bank of Cleveland, issue Q II, pages 2-9.
    18. Gianni De Nicolo, 2000. "Size, charter value and risk in banking: an international perspective," International Finance Discussion Papers, Board of Governors of the Federal Reserve System (U.S.) 689, Board of Governors of the Federal Reserve System (U.S.).
    19. Claessens, Stijn & Demirguc-Kunt, Asl[iota] & Huizinga, Harry, 2001. "How does foreign entry affect domestic banking markets?," Journal of Banking & Finance, Elsevier, Elsevier, vol. 25(5), pages 891-911, May.
    20. Boyan Jovanovic & Peter L. Rousseau, 2008. "Mergers as Reallocation," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 765-776, November.
    21. Boyan Jovanovic & Peter L. Rousseau, 2002. "The Q-Theory of Mergers," NBER Working Papers 8740, National Bureau of Economic Research, Inc.
    22. Amihud, Yakov & DeLong, Gayle L. & Saunders, Anthony, 2002. "The effects of cross-border bank mergers on bank risk and value," Journal of International Money and Finance, Elsevier, Elsevier, vol. 21(6), pages 857-877, November.
    23. De Nicolo, Gianni & Kwast, Myron L., 2002. "Systemic risk and financial consolidation: Are they related?," Journal of Banking & Finance, Elsevier, Elsevier, vol. 26(5), pages 861-880, May.
    24. Martin Summer, 2003. "Banking Regulation and Systemic Risk," Open Economies Review, Springer, Springer, vol. 14(1), pages 43-70, January.
    25. Cara S. Lown & Carol L. Osler & Philip E. Strahan & Amir Sufi, 2000. "The changing landscape of the financial services industry: what lies ahead?," Economic Policy Review, Federal Reserve Bank of New York, Federal Reserve Bank of New York, issue Oct, pages 39-54.
    26. Viral V. Acharya & Iftekhar Hasan & Anthony Saunders, 2002. "The effects of focus and diversification on bank risk and return: evidence from individual bank loan portfolios," Proceedings, Federal Reserve Bank of Chicago 905, Federal Reserve Bank of Chicago.
    27. Ben Craig & João Cabral dos Santos, 1997. "The risk effects of bank acquisitions," Economic Review, Federal Reserve Bank of Cleveland, Federal Reserve Bank of Cleveland, issue Q II, pages 25-35.
    28. Jennifer S. Crystal & B. Gerard Dages & Linda S. Goldberg, 2001. "Does foreign ownership contribute to sounder banks in emerging markets? the Latin American experience," Staff Reports, Federal Reserve Bank of New York 137, Federal Reserve Bank of New York.
    29. Roy C. Smith & Ingo Walter, 1998. "Global Patterns of Mergers and Acquisition Activity in the Financial Services Industry," New York University, Leonard N. Stern School Finance Department Working Paper Seires, New York University, Leonard N. Stern School of Business- 98-060, New York University, Leonard N. Stern School of Business-.
    30. William R. White, 1998. "The coming transformation of continental european banking?," BIS Working Papers 54, Bank for International Settlements.
    31. Schüler, Martin, 2002. "The threat of systemic risk in banking: Evidence for Europe," Research Notes 3a, Deutsche Bank Research.
    32. Gianni De Nicoló & Myron L. Kwast, 2002. "Systemic Risk and Financial Consolidation," IMF Working Papers 02/55, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Claudio Agostini & Eduardo Saavedra & Manuel Willington, 2012. "Economies of Scale and Merger Efficiencies: Empirical Evidence from the Chilean Pension Funds Market," ILADES-Georgetown University Working Papers, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines inv285, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines.
    2. Nicola Cetorelli & Beverly Hirtle & Donald Morgan & Stavros Peristiani & João Santos, 2007. "Trends in financial market concentration and their implications for market stability," Economic Policy Review, Federal Reserve Bank of New York, Federal Reserve Bank of New York, issue Mar, pages 33-51.
    3. Bruce D. Smith & Gianni De Nicoló & John H. Boyd, 2003. "Crisis in Competitive Versus Monopolistic Banking Systems," IMF Working Papers 03/188, International Monetary Fund.
    4. Elena Loukoianova, 2008. "Analysis of the Efficiency and Profitability of the Japanese Banking System," IMF Working Papers 08/63, International Monetary Fund.
    5. Alicia Garcia-Herrero & Daniel Navia Simon, 2006. "Why Banks go to Emerging Countries and What is the Impact for the Home Economy? A Survey," Working Papers, BBVA Bank, Economic Research Department 0602, BBVA Bank, Economic Research Department.
    6. Caprio, Gerard & Honohan, Patrick, 2004. "Can the unsophisticated market provide discipline?," Policy Research Working Paper Series 3364, The World Bank.
    7. James Crotty, 2007. "If Financial Market Competition is so Intense, Why are Financial Firm Profits so High? Reflections on the Current ‘Golden Age’ of Finance," Working Papers, Political Economy Research Institute, University of Massachusetts at Amherst wp134, Political Economy Research Institute, University of Massachusetts at Amherst.
    8. Melanie S. Milo, 2007. "Integrated Financial Supervision : An Institutional Perspective for the Philippines," Finance Working Papers 22667, East Asian Bureau of Economic Research.
    9. Gianni De Nicoló & Patrick Honohan & Alain Ize, 2003. "Dollarization of the Banking System," IMF Working Papers 03/146, International Monetary Fund.
    10. Inwon Song, 2004. "Foreign Bank Supervision and Challenges to Emerging Market Supervisors," IMF Working Papers 04/82, International Monetary Fund.
    11. Martin Cihák & Richard Podpiera, 2006. "Isone Watchdog Better Than Three? International Experience with Integrated Financial Sector Supervision," IMF Working Papers 06/57, International Monetary Fund.
    12. Sufian, Fadzlan & Habibullah, Muzafar Shah, 2012. "Globalizations and bank performance in China," Research in International Business and Finance, Elsevier, Elsevier, vol. 26(2), pages 221-239.
    13. De Nicolo, Gianni & Honohan, Patrick & Ize, Alain, 2003. "Dollarization of the banking system : good or bad?," Policy Research Working Paper Series 3116, The World Bank.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:03/158. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow) or (Hassan Zaidi).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.