Carletti, Elena; Hartmann, Philipp; Spagnolo, Giancarlo - 2006
We model the impact of bank mergers on loan competition, reserve holdings and aggregate liquidity. A merger changes the … them because of a diversification effect. The merger also affects loan market competition, which in turn modifies the … distribution of bank sizes and aggregate liquidity needs. Mergers among large banks tend to increase aggregate liquidity needs and …