Bank Mergers and Deposit Rate Rigidity

Valeriya Dinger

Journal of Financial Services Research, 2015, vol. 47, issue 1, 27-56

Abstract: In this paper, I empirically explore the relation between bank mergers and the rigidity of banks’ deposit rates. I find that merging banks are more likely to change their deposit rates in the first months following a merger. However, in the long term, merging banks change their deposit rates less frequently than non-merging banks. This finding is particularly true after mergers with large target banks and after mergers with a substantial geographical expansion of the bank’s operations. The documented post-merger deposit rate rigidity has important implications for the evaluation of merger effects in the context of anti-trust and monetary policies. Copyright Springer Science+Business Media New York 2015

Keywords: Bank mergers; Bank market structure; Interest rate dynamics; Hazard rate; JEL Classifications; L11; L13; D43; G21 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s10693-013-0182-2

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