The Integration of the Financial Services Industry: Where are the Efficiencies?

39 Pages Posted: 4 Oct 2000

See all articles by Allen N. Berger

Allen N. Berger

University of South Carolina - Darla Moore School of Business; Wharton Financial Institutions Center; European Banking Center

Abstract

We examine the efficiency effects of the integration of the financial services industry and suggest directions for future research. We also propose a relatively broad working definition of integration and employ U.S. and European data on financial service industry M&As to illustrate several types of integration. The analysis suggests that there is a large potential for efficiency gains from integration, but only a relatively small part of this potential may be realized. Integration appears to bring about larger revenue efficiency gains than cost efficiency gains, and most of the gains appear to be linked to benefits from risk diversification.

Keywords: Banks, insurance, securities firms, mergers, efficiency, international finance

JEL Classification: G21, G22, G24, G28, G34, F23, F36

Suggested Citation

Berger, Allen N., The Integration of the Financial Services Industry: Where are the Efficiencies?. FEDS Paper No. 2000-36. Available at SSRN: https://ssrn.com/abstract=239402 or http://dx.doi.org/10.2139/ssrn.239402

Allen N. Berger (Contact Author)

University of South Carolina - Darla Moore School of Business ( email )

1705 College St
Francis M. Hipp Building
Columbia, SC 29208
United States
803-576-8440 (Phone)
803-777-6876 (Fax)

Wharton Financial Institutions Center

Philadelphia, PA 19104-6367
United States

European Banking Center

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

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