Regulatory Regimes and Takeovers of U.S. Thrifts

Fatma Cebenoyan (), A. Sinan Cebenoyan () and Elizabeth S. Cooperman

Economics Working Paper Archive at Hunter College from Hunter College Department of Economics

Abstract: This paper examines the effect of regulatory regime changes on the attributes of acquired thrifts for periods of stringency in 1990 to 1993, and deregulation in 1994 to 2000, with the removal of significant impediments for bank takeovers of thrifts. We test a regime change hypothesis that predicts a more effective takeover market in the later regime. Consistent with the hypothesis, we find bank acquirers to engage in diverse motivations for takeovers in the later regime, including revenue turnaround motives, allowing discipline of profit inefficient firms. The results suggest greater takeover discipline in the later regime, but also suggest a complimentary role for regulatory discipline, with acquirers avoiding more cost inefficient and risky thrifts. In contrast in the early regime, regulatory concerns for building up capital dominate acquisition decisions.

Keywords: Regulatory Regimes; Thrifts; Takeovers; Profit and Cost Efficiency (search for similar items in EconPapers)
JEL-codes: G21 G28 G34 (search for similar items in EconPapers)
Date: 2003
New Economics Papers: this item is included in nep-cfn and nep-com
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Persistent link: https://EconPapers.repec.org/RePEc:htr:hcecon:303

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