Animosity towards the business of finance is ancient and persistent. As finance creates intangible value, its contribution is invisible to many observers, but the proposed remedy – increased statutory regulation – may heighten, rather than mitigate the exposure of taxpayers and households to...

This project explores the link between managerial overconfidence and banks' asset valuation behavior in the aftermath of the 2007 financial crisis. Using intra-bank variations, it provides empirical evidence that banks with overconfident CFOs rely more heavily on valuation models designed for...

The recent financial turmoil and the bailouts of some large financial institutions in the US and Europe have raised major concerns that the increased size and complexity of financial institutions may give rise to negative ramifications for systemic risk. In this paper, we investigate whether...

Most bank merger studies do not control for hidden bailouts, which may lead to biased results. In this study we employ a unique data set of approximately 1000 mergers to analyze the determinants of bank mergers. We use undisclosed information on banks' regulatory intervention history to...

The impact of cross-border bank M&As on bank risk remains an open question. Though geographically diversifying bank M&As have the potential to reduce the risk of bank insolvency, they also have the potential to increase that risk due to the increase in risk-taking incentives for bank managers...

Following recent developments in some European jurisdictions, the Committee on European Securities Regulators (CESR) proposed “to extend major shareholding notifications to instruments of similar economic effect to holding shares and entitlements to acquire shares” on 9 February 2010. This...

This study investigates the implications of the cumulative prospect theory in the context of U.S. bank acquisitions, with particular emphasis on its probability weighting component. Specifically, we examine whether gambling attitudes matter in U.S. bank takeover decisions. The evidence...

Methodologically, this paper frames the opportunity cost of any merger as the value of the alternative deals it precludes or defers. This challenges the standard event-study hypothesis that stock markets benchmark the value of a merger deal by the profits the partners would have earned in...

The European banking landscape has experienced a profound restructuring since the mid 1980ties and still is substantially changing. In the last three years, prior to the formal start of the European Monetary Union, we counted more completed large mergers and acquisitions (Mamp;A) than in the...

We compare accounting-based with stock price-based performance measures for a small sample of Italian listed banks acquired over the period 1992-1997. On average the performance change after the acquisition is positive, according to both type of indicators. However, there is very little...