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Consolidation and Efficiency in the Financial Sector: A Review of the International Evidence

Author

Listed:
  • Dean F. Amel

    (Federal Reserve Board - Financial Structure Section)

  • Colleen Barnes

    (Government of Canada - Department of Finance Canada)

  • Fabio Panetta

    (Bank of Italy - Research Department)

  • Carmelo Salleo

    (Bank of Italy - Research Department)

Abstract

In response to fundamental changes in regulation and technology, the financial industry around the world is undergoing an unprecedented wave of consolidation. A growing body of empirical literature has attempted to measure the efficiency gains from M&As; however there is little sense of how the results might depend on the country, industry and time period analysed. In this paper we review critically works that cover the main sectors of the financial industry (commercial and investment banks, insurance and asset management companies) in the major industrialised countries over the last twenty years, searching for common patterns that transcend national and sectoral peculiarities. We find that consolidation in the financial sector is beneficial up to a relatively small size in order to reap economies of scale, but there is little evidence that mergers yield economies of scope or gains in managerial efficiency

Suggested Citation

  • Dean F. Amel & Colleen Barnes & Fabio Panetta & Carmelo Salleo, 2003. "Consolidation and Efficiency in the Financial Sector: A Review of the International Evidence," CEIS Research Paper 20, Tor Vergata University, CEIS.
    • Handle: RePEc:rtv:ceisrp:20
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    7. Robert DeYoung & Douglas Evanoff & Philip Molyneux, 2009. "Mergers and Acquisitions of Financial Institutions: A Review of the Post-2000 Literature," Journal of Financial Services Research, Springer;Western Finance Association, vol. 36(2), pages 87-110, December.
    8. Mai, Nhat Chi, 2015. "Efficiency of the banking system in Vietnam under financial liberalization," OSF Preprints qsf6d, Center for Open Science.
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    More about this item

    Keywords

    Mergers; Efficiency; Bank Mergers; Insurance Companies; Asset Management;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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    Access and download statistics

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