We model the impact of bank mergers on loan competition, banks' reserve holdings and aggregate liquidity. Banks compete in a differentiated loan market, hold reserves against liquidity shocks, and refinance in the interbank market. A merger creates an internal money market that induces financial...

This study has been commissioned by the Competition Directorate- General of the European Commission (from hereon DG Competition) to develop “a detailed methodological approach for the ex-post review of European Commission decisions in the field of merger control, namely for assessing the...