Divestiture as an Antitrust Remedy in Bank Mergers
25 Pages Posted: 26 Aug 1998
Date Written: December 30, 1997
The purpose of this study is to determine whether, from a public policy standpoint, divestitures constitute an effective antitrust remedy in bank merger cases. A number of findings emerge from the study: Divested branches have a remarkable survival record; structural changes effected by divestitures tend to persist over time; larger buyers of divested branches tended to be more successful than smaller buyers; divestiture of the target institutions' branches rather than those of applicants proved preferable from an antitrust standpoint; and divested branches selected by the Department of Justice do not perform better than others. The findings suggest that divestitures of bank offices have generally provided an effective public policy remedy.
JEL Classification: L49, G21
Suggested Citation: Suggested Citation