Purpose

The purpose of this paper is to examine the effects of bank mergers on systemic and systematic risks on the relative merits of product and market diversification strategies. It also observes determinants of M&A deals criteria, product and market diversification positioning, crisis threshold and other regulatory and market factors.

Design/methodology/approach

This research examines the impact and association between merger announcements and regulatory reforms at bank and system levels by investigating the impact of various bank consolidation strategies on firms’ risks. We estimate beta(s) as an index of financial institutions’ systematic risk. We then develop an index of the estimated equity value loss as the long-rum marginal expected shortfall (LRMES). LRMES contributes to compute systemic risk (SRISK) contribution of these firms, which is the capital that a firm is expected to need if we have another financial crisis.

Findings

Large acquiring banks decrease systemic risk contribution in cross-border M&As with a non-bank financial institution, and witness profitability (ROA) gains, supporting geographic diversification stability. Capital requirements, activity restrictions and bank concentration increase systemic risk contribution in national mergers. Bank mergers with investment FIs targets enhance productivity but impair technical efficiency, contrary to bank-real estate deals where technical efficiency change accompanied lower systemic risk contribution.

Practical implications

Financial institutions are recommended to avoid trapped capital and liquidity by efficiently using local balance sheet and strengthening them via implementing models that clearly set diversification and netting benefits to determine capital reserves and to drive capital efficiency through the clarity on product–activity–geography diversification and focus. This contributes to successful ringfencing, decreases compliance costs and maximises returns and minimises several risks including systemic risk.

Social implications

Policy implications: the adversative properties of bank mergers in respect of systemic risk require strict and innovative monitoring of bank mergers from the bidding level by both acquirers and targets and regulators and competition supervisory bodies. Moreover, emphasis on regulators/governments intervention and role, as it provides a stabilising factor of the markets and consecutively lower systemic risk even if the systematic idiosyncratic risk contribution was significant. However, such roles have to be well planned and scaled to avoid providing motives for banks to seek too-big-too-fail or too-big-to-discipline status.

Originality/value

This research contributes to the renewing regulatory debate on banks sustainable structures by examining the risk effect of bank diversification versus focus. The authors aim to address the multidimensional impacts and risks inherent to M&A deals, by examining the extent of the interconnectedness of M&A and its implications within and beyond the banking sector.

中文翻译：

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银行合并：监管，风险和收益的周期性行为

目的

本文的目的是研究银行合并对系统性和系统性风险对产品和市场多元化策略相对优劣的影响。它还观察并购交易标准，产品和市场多元化定位，危机门槛以及其他监管和市场因素的决定因素。

设计/方法/方法

本研究通过调查各种银行合并策略对公司风险的影响，研究了合并公告与银行和系统层面的监管改革之间的影响和关联。我们估计beta是金融机构系统性风险的指标。然后，我们将估计股本价值损失的指标作为长期朗姆酒的边际预期缺口（LRMES）建立。LRMES有助于计算这些公司的系统风险（SRISK）贡献，这是如果我们遇到另一场金融危机，则期望一家公司需要的资本。

发现

大型收单行减少了与非银行金融机构进行的跨国并购中的系统性风险贡献，并见证了获利（ROA）收益，从而支持了地域多元化的稳定性。资本要求，活动限制和银行集中度增加了国家兼并中的系统性风险贡献。银行与投资金融机构的合并目标提高了生产率，但损害了技术效率，这与银行房地产交易相反，在银行房地产交易中，技术效率的变化伴随着较低的系统风险贡献。

实际影响

建议金融机构通过有效利用本地资产负债表，并通过实施明确设置多元化和净收益的模型来确定资本储备，并通过明确产品-活动-地域多元化和关注焦点来提高资本效率，来避免陷入资本和流动性困局。 。这有助于成功进行隔离，降低合规成本，最大程度地提高回报，并将包括系统性风险在内的多种风险降至最低。

社会影响

政策影响：与系统性风险有关的银行兼并的不利性质要求并购方和收购方以及监管者和竞争监管机构从招标层面对银行并购进行严格而创新的监控。此外，强调监管者/政府的干预和作用，因为它提供了市场的稳定因素，并且即使系统性特质风险贡献显着，也可连续降低系统性风险。但是，此类角色必须经过精心计划和扩展，以避免为银行寻求太大失败或太大纪律地位提供动力。

创意/价值

这项研究通过检查银行多元化相对于重点的风险影响，为有关银行可持续结构的新监管辩论做出了贡献。作者旨在研究并购相互关联的程度及其在银行业内部和外部的影响，从而解决并购交易固有的多方面影响和风险。