Strategic Communication among Banks

60 Pages Posted: 22 Dec 2021 Last revised: 8 Mar 2024

See all articles by Christian Bittner

Christian Bittner

Deutsche Bundesbank; Goethe University Frankfurt

Falko Fecht

Deutsche Bundesbank; Frankfurt School of Finance & Management

Melissa Pala

DHBW Karlsruhe

Farzad Saidi

University of Bonn

Multiple version iconThere are 2 versions of this paper

Date Written: March 4, 2024


Do economic incentives govern information diffusion in markets? Using international banks’ advisory activities in corporate takeovers as their source of private information, we show in supervisory data that banks with closer ties to the target, but not the acquirer, advisor trade profitably in the target’s stock prior to the deal announcement. This trading behavior is associated with a higher premium paid by the acquirer without compromising the deal success. As the incentives of informed traders are aligned only with those of the target shareholders, which are represented by the target advisor, our evidence suggests strategic information transmission among these banks.

Keywords: bank networks, trading, information transmission, mergers and acquisitions, syndicated lending

JEL Classification: D22, G14, G20, G21, L14

Suggested Citation

Bittner, Christian and Fecht, Falko and Pala, Melissa and Saidi, Farzad, Strategic Communication among Banks (March 4, 2024). Available at SSRN: or

Christian Bittner

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431

Goethe University Frankfurt ( email )

House of Finance
Theodor-W.-Adorno-Platz 3
Frankfurt, Hesse 60629

Falko Fecht (Contact Author)

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
+4969956632312 (Phone)

HOME PAGE: http://

Frankfurt School of Finance & Management ( email )

Adickesallee 32-34
Frankfurt am Main, 60322

Melissa Pala

DHBW Karlsruhe ( email )

Farzad Saidi

University of Bonn ( email )

Regina-Pacis-Weg 3
Postfach 2220
Bonn, D-53012

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