Bank Acquisitiveness and Financial Crisis Vulnerability

Saqib Aziz (1, 2) , Michael Dowling (1) , Jean-Jacques Lilti (2)

1 ESC Rennes School of Business
2 CREM - Centre de recherche en économie et management

We investigate the relation between European bank acquisitiveness during the period 1990-2006 and the vulnerability of banks to the financial crisis. Our main tests use distance to default and Z-score ratios to estimate banks impact from the financial crisis in terms of bankruptcy risk and solvency. The findings shed new light on whether bank acquisitions really did contribute towards weakness; and suggest that only acquisitions of investment banking assets increased risk, while acquisition of retail banking assets actually lowered solvency risk.

Mots clés: Financial Crisis; Mergers and Acquisitions; Probability of Default; Solvency; Investment Banking

Domaines: Economies et finances

Saqib Aziz, Michael Dowling, Jean-Jacques Lilti. Bank Acquisitiveness and Financial Crisis Vulnerability. Bankers Markets & Investors : an academic & professional review, 2016, Vol. 143 (143), pp.26-44. ⟨halshs-01360952⟩