Regulatory Regime Changes and Acquisition Attributes: The Case of Commercial Bank and Thrift Acquisitions of Thrifts
Cebenoyan, F., A.S. Cebenoyan and E. S. Cooperman; Regulatory Regime Changes and Acquisition Attributes: The Case of Commercial Bank and Thrift Acquisitions of Thrifts; Quarterly Journal of Finance and Accounting, V 47 (1), 2008, pp. 27-52.
38 Pages Posted: 22 Jan 2016
Date Written: January 20, 2016
Significant change in regulations affecting bank/thrift activities during the 1990’s provide us with an opportunity to examine for shifts in acquisition characteristics as deregulation leads to changes in behavior. Consistent with a regime change hypothesis, we find a structural change in acquisition attributes for pre- and post deregulation periods. We also report significant differences in target attributes depending on acquirer identity. Our results demonstrate a higher likelihood in the deregulated period after 1994 for banks to acquire profit inefficient thrifts, while thrift acquirers focus mainly on building size. In contrast, regulatory concerns appear to dominate in prior years, with capitalization as a key acquisition characteristic by thrift acquirers. The results suggest that regimes need to be controlled for in research to allow generalizations beyond period-specific implications.
JEL Classification: G21
Suggested Citation: Suggested Citation