Will the Adoption of Basel II Encourage Increased Bank Merger Activity? Evidence from the United States

Bericht

This study presents two tests of the hypothesis that adoption of an internal ratings-based approach to determining minimum capital requirements, proposed as part of the Basel II capital accord, would cause adopting banking organizations to increase their acquisition activity. The study employs U.S. data and focuses on the advanced internal ratings-based approach, as proposed for banking organizations in the United States. The first test estimates the relationship between excess regulatory capital and subsequent merger activity, including organization and time fixed effects, while the second test employs a " difference in difference" analysis of the change in merger activity that occurred the last time U.S. regulatory capital standards were changed. Estimated coefficients and observed differences have signs consistent with the hypothesis, but results are either statistically insignificant or imply differences that are small in magnitude.

Object Details

• ISBN: 978-3-902109-26-2
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SUERF Studies ; No. 2005/1

Classification and Topics

• Classification: Wirtschaft ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Financial Institutions and Services: Government Policy and Regulation ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill ; Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
• Subject: Basel II ; Capital ; Mergers ; Bank ; Fusion ; Schätzung ; USA ; Basler Akkord

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hannan, Timothy H. ; Pilloff, Steven J.
• Event: Veröffentlichung
• (who): SUERF - The European Money and Finance Forum
• (where): Vienna
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/163466
• Last update: 10.03.2025, 11:42 AM CET