Bank Mergers, Competition and Liquidity

We model the impact of bank mergers on loan competition, reserve holdings and aggregate liquidity. A merger creates an internal money market that affects reserve holdings and induces financial cost advantages, but also withdraws liquidity from the interbank market. Loan market competition modifies the heterogeneity in the size of banks, thus affecting aggregate liquidity. Mergers among large banks tend to increase aggregate liquidity needs and thus the liquidity provision in monetary operations by the central bank.

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Year of publication:	2005
Authors:	Carletti, Elena ; Hartmann, Philipp ; Spagnolo, Giancarlo
Publisher:	Stockholm : Sveriges Riksbank
Subject:	Credit market competition \| bank reserves \| internal money market \| banking system liquidity

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Series:	Sveriges Riksbank Working Paper Series ; 182
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	877477655 [GVK] hdl:10419/82498 [Handle] RePEc:hhs:rbnkwp:0182 [RePEc]
Classification:	D43 - Oligopoly and Other Forms of Market Imperfection ; G21 - Banks; Other Depository Institutions; Mortgages ; G28 - Government Policy and Regulation ; L13 - Oligopoly and Other Imperfect Markets
Source:	EconStor

Persistent link: https://www.econbiz.de/10010321358