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The risk effects of bank acquisitions

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Abstract

An examination of the risk effects of bank acquisitions that occurred between the first quarter of 1984 and the last quarter of 1993. Its findings -- that banks are not using acquisitions to increase their risk exposure and that acquisitions increase profitability over time -- cast doubt on the importance of risk diversification as a motive for bank acquisitions.

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  • Ben R. Craig & João A. C. Santos, 1997. "The risk effects of bank acquisitions," Economic Review, Federal Reserve Bank of Cleveland, issue Q II, pages 25-35.
    • Handle: RePEc:fip:fedcer:y:1997:i:qii:p:25-35
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    References listed on IDEAS

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    1. Ben R. Craig & João A. C. Santos, 1996. "Performance and asset management effects of bank acquisitions," Working Papers (Old Series) 9619, Federal Reserve Bank of Cleveland.
    2. 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, vol. 27(3), pages 777-788, August.
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    7. Donald R. Fraser & James Kolari, 1987. "Determinants of small bank acquisition premiums," Proceedings 168, Federal Reserve Bank of Chicago.
    8. Berger, Allen N. & Hunter, William C. & Timme, Stephen G., 1993. "The efficiency of financial institutions: A review and preview of research past, present and future," Journal of Banking & Finance, Elsevier, vol. 17(2-3), pages 221-249, April.
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