The Real Effects of Distressed Bank Mergers

@article{Dinger2020TheRE,
  title={The Real Effects of Distressed Bank Mergers},
  author={Valeriya Dinger and Christian W. Schmidt and Erik Theissen},
  journal={ERN: Commercial Banks (Topic)},
  year={2020}
}
In this paper we revisit the question whether negative shocks to banks have adverse real economic effects. We analyze German savings banks and propose a new identification strategy. We consider distressed mergers and interpret them as exogenous shocks to the (initially non-distressed) acquiring bank. We find that in the years after a distressed merger (i) the performance of acquiring savings banks deteriorates; (ii) the shock is transmitted to firms in the acquirer’s region who cut back… Expand

References

SHOWING 1-10 OF 76 REFERENCES
The Real Effects of Bank Distress: Evidence from Bank Bailouts in Germany
How does bank distress impact their customers' probability of default and trade credit availability? We address this question by looking at a unique sample of German firms from 2000 to 2011. WeExpand
The real effects of bank distress: Evidence from bank bailouts in Germany
How does bank distress impact their customers' probability of default and trade credit availability? We address this question by looking at a unique sample of German firms from 2000 to 2011. WeExpand
The Effect of Banking Crisis on Bank-Dependent Borrowers
We provide causal evidence that adverse capital shocks to banks affect their borrowers' performance negatively. We use an exogenous shock to the U.S. banking system during the Russian crisis of FallExpand
Real Effects of the Sovereign Debt Crisis in Europe: Evidence from Syndicated Loans
This paper shows that the sovereign debt crisis and the resulting credit crunch in the periphery of the Eurozone lead to negative real effects for borrowing firms. Using a hand matched sample of loanExpand
Accounting for Distress in Bank Mergers
The inability of most bank merger studies to control for hidden bailouts may lead to biased results. In this study, we employ a unique data set of approximately 1,000 mergers to analyze theExpand
Whatever it Takes: The Real Effects of Unconventional Monetary Policy
Launched in Summer 2012, the European Central Bank (ECB)'s Outright Monetary Transactions (OMT) program indirectly recapitalized European banks through its positive impact on periphery sovereignExpand
Shock Transmission Through Cross-Border Bank Lending: Credit and Real Effects
We study the transmission of financial shocks across borders through international bank connections. Using data on cross-border interbank loans among 6,000 banks during 1997–2012, we estimate theExpand
Disentangling the Effects of a Banking Crisis: Evidence from German Firms and Counties
Lending cuts by banks directly affect the firms borrowing from them, but also indirectly depress economic activity in the regions in which they operate. This paper moves beyond firm-level studies byExpand
Preemptive Distress Resolution Through Bank Mergers
This paper suggests a motive for bank mergers that goes beyond alleged and typically unverifiable scale economies: preemptive resolution of banks' financial distress. Such distress mergers can be aExpand
Liquidity Shocks, Local Banks, and Economic Activity: Evidence from the 2007-2009 Crisis
This paper studies the relationship between shocks to local banks and economic activity, by exploiting differences in the liability structure of small U.S. commercial banks during the 2007-09 crisis.Expand
...
1
2
3
4
5
...