Bank Acquisitiveness and Bailouts: Evidence on European Banks during the 2008 Financial Crisis

Saqib Aziz, Jean-Jacques Lilti () and Khalid Elbadraoui ()
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Saqib Aziz: ESC Rennes School of Business - ESC [Rennes] - ESC Rennes School of Business
Jean-Jacques Lilti: CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique
Khalid Elbadraoui: Université Ibn Zohr = Ibn Zohr University [Agadir], ENCGT - Ecole Nationale de Commerce et de Gestion de Tanger - UAE - Abdelmalek Essaadi University [Tétouan] = Université Abdelmalek Essaadi [Tétouan]

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Abstract: Bank bailouts perhaps share the list of the most widely discussed topics during the debate over the 2008 financial crisis. Banks that were termed strong were trapped in the financial distress in a very short time span and subscribed to the hefty bailouts to come out of this turmoil. It is argued that banks pursue mergers and acquisitions (M&A afterward) strategies to increase their size, which potentially increases their "too-big-to-fail" (TBTF henceforth), associated benefits. Prior to the recent financial crisis, M&A activity facilitated the emergence of few large and structurally complex banking institutions (Weiß et al., 2014) while spearheading a significant phase of consolidation in the banking industry (De Young et al., 2009). This paper investigates whether and how the acquisitiveness of large European banks in the period before crisis relate with their bailout support during the 2008 financial crisis.

Keywords: 2008 financial crisis; Bank Acquisitiveness (search for similar items in EconPapers)
Date: 2017-07
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Published in Bankers Markets & Investors : an academic & professional review, 2017, 149, pp.40-61

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01717978

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