Bank Consolidation and Systemic Risk: M&A During the 2008 Financial Crisis

Gregory D. Maslak and Gonca Senel ()
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Gregory D. Maslak: Bowdoin College
Gonca Senel: Bowdoin College

Journal of Financial Services Research, 2023, vol. 63, issue 2, No 5, 220 pages

Abstract: Abstract In this paper, we analyze the relationship between US bank consolidation and systemic risk before, during, and after the 2008 financial crisis. We find that mergers during the crisis decreased market-adjusted systemic risk. This effect was more pronounced for mergers with smaller acquirers of larger targets. Meanwhile, mergers of larger banks increased the aggregate systemic risk. In the years following the crisis, we find that banks that merged during the crisis had lower return volatility and fewer nonperforming loans than non-merged banks. Comparing pre-and post-crisis mergers, we do not find a significant difference with respect to their effect on systemic risk.

Keywords: Banks; M&A; Systemic risk; Financial crises; G01; G21; G28; G32; G34 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s10693-022-00380-5

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