Abstract
This paper analyzes the effects of mergers and acquisitions on bank pricing behavior. Using the Monti-Klein Model and the data set of French consolidation transactions happening between 1996 and 2006, we find that, on average, loan pricing tends to increase with the default risk and have negative relationship with efficiency and GDP growth rate. Bank profitability, deposit ratio and liquid risk have no significant impact. Bank market characteristic (CR5 concentration ratio) was not been significant too. French banks decide their loan interest rates independently from market concentration level.
Full Text
Published Version
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call