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Determinants of domestic and cross-border bank acquisitions in the European Union

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Listed:
  • Ignacio Hernando
  • Maria J. Nieto
  • Larry D. Wall

Abstract

This paper analyzes the determinants of bank acquisitions both within and across 25 members of the European Union (EU-25) during the period 1997?2004. Our results suggest that poorly managed banks (those with a high cost-to-income ratio) and larger banks are more likely to be acquired by other banks in the same country. The probability of being a target in a cross-border deal is larger for banks that are quoted in the stock market. Finally, banks operating in more concentrated markets are less likely to be acquired by other banks in the same country but are more likely to be acquired by banks in other EU-25 countries.

Suggested Citation

  • Ignacio Hernando & Maria J. Nieto & Larry D. Wall, 2008. "Determinants of domestic and cross-border bank acquisitions in the European Union," FRB Atlanta Working Paper 2008-26, Federal Reserve Bank of Atlanta.
    • Handle: RePEc:fip:fedawp:2008-26
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    More about this item

    Keywords

    Banks and banking - Europe;

    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

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