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Financial consolidation and liquidity: prudential regulation and/or competition policy? Author info | Abstract | Publisher info | Download info | Related research | Statistics Patrick Van Cayseele () (K.U.Leuven, Belgian Competition Authority)
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A model of loan rate competition with liquidity provision by banks is used to study bank mergers. Both loan rate competition and liquidity needs are seen to be "localised" phenomena. This allows for tracing down the effects of particular types of bank mergers. As such, we contrast the effects of "revenue base enhancing" mergers with the effects of mergers "for market power". The optimal post merger loan rate and risk management decisions are derived. The fundamental trade-off between stability and efficiency is often present, indicating that the approval of bank mergers induces difficult policy choices.
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Paper provided by National Bank of Belgium in its series Research series with number
200405-6.
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Length: 53 pages
Date of creation: May 2004Date of revision:
Handle: RePEc:nbb:reswpp:200405-6Contact details of provider: Postal: Boulevard de Berlaimont 14, B-1000 Bruxelles Phone: (+ 32) (0) 2 221 25 34 Fax: (+ 32) (0) 2 221 31 62 Email: Web page: http://www.nbb.be More information through EDIRC
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Keywords: bank mergers ; merger review process ; liquidity ; loan Rates ; Other versions of this item:
Find related papers by JEL classification: D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages L40 - Industrial Organization - - Antitrust Issues and Policies - - - General G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
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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.: John Vickers, 2000.
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