Effects of US Bank Mergers on Bank Risk and Value

Seminar paper from the year 2006 in the subject Business economics - Investment and Finance, grade: 1,3, Humboldt-University of Berlin (Institut für Bank- und Börsenwesen), course: Hauptseminar Finanzierung, language: English, abstract: This paper observes the impacts of domestic US commercial bank M&As in the 1990s on individual institutions. It shows potential changes in a bank¿s risk exposure and how these can affect a merged bank¿s value. It provides a theoretical consideration as well as a review of empirical studies. The result is that a merger might lead to a risk benefit. In this case, there is, c.p., potential for a value increase. Empirically, risk benefits were either absent or offset by managers¿ higher risk taking.