Mergers in financial services and overlending
In this paper we build a model of banking competition that considers a managerial-overconfidence setup resulting in two main findings. First, a merger between rational banks may change their behaviour in that, in post-merger conditions, they would follow the overconfident bank when they would not ha...
| Autores: | , |
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| Tipo de recurso: | artículo |
| Fecha de publicación: | 2018 |
| País: | España |
| Institución: | Universidad de Santiago de Compostela (USC) |
| Repositorio: | Minerva. Repositorio Institucional de la Universidad de Santiago de Compostela |
| Idioma: | inglés |
| OAI Identifier: | oai:minerva.usc.gal:10347/45419 |
| Acceso en línea: | https://hdl.handle.net/10347/45419 |
| Access Level: | acceso abierto |
| Palabra clave: | Banking efficiency Behavioural finance Mergers Herding Merger paradox Overconfidence |
| Sumario: | In this paper we build a model of banking competition that considers a managerial-overconfidence setup resulting in two main findings. First, a merger between rational banks may change their behaviour in that, in post-merger conditions, they would follow the overconfident bank when they would not have done so pre-merger, thereby amplifying the credit boom. Second, the results overcome the merger paradox, in the sense that the merger would be profitable for participants, and thus intrinsically stable. |
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