Whom to Merge with? A Tale of the Spanish Banking Deregulation Process

Ana Lozano-Vivas, Miguel Meléndez-Jiménez () and Antonio Morales ()

No 2010-03, Working Papers from Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center

Abstract: We put forward a simple spatial competition model to study banks’ strategic responses to the Spanish asymmetric geographic deregulation. We find that once geographic deregulation process finishes, inter-regional mergers between the savings banks are optimal. We claim that the public good nature of the merging activities together with the incentives provided by the deregulation process are the driving factors behind the equilibrium merger of the savings banks. It seems that the economic crisis will finally force regional politicians to allow inter-regional caja mergers, letting the consequences of the removal of geographic barriers in the 80’s come to a fruition with a delay of thirty years.

Keywords: Banking Competition; Deregulation; Mergers (search for similar items in EconPapers)
JEL-codes: C72 G21 G28 L13 L41 L51 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2010-03
New Economics Papers: this item is included in nep-ban and nep-com
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Persistent link: https://EconPapers.repec.org/RePEc:mal:wpaper:2010-3

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