CARLETTI, ELENA; HARTMANN, PHILIPP; SPAGNOLO, GIANCARLO - In: Journal of Money, Credit and Banking 39 (2007) 5, pp. 1067-1105
We model the impact of bank mergers on loan competition, reserve holdings, and aggregate liquidity. A merger changes the distribution of liquidity shocks and creates an internal money market, leading to financial cost efficiencies and more precise estimates of liquidity needs. The merged banks...