Comment on Peek, Rosengren, and Kasirye

Article Abstract:

Joe Peek, Eric Rosengren and Faith Kasirye concluded that foreign banks target underperforming banks as candidates for acquisition and make poor decisions after the completion of the deal to explain its underperformance in the US. However, the authors should have noted that 85% of foreign banks operate only in four states and that there are no foreign banks operating in half the states. Thus, this implies that foreign banks are concentrating on international trade services rather than adopting a broad-based strategy. In addition, foreign banks do not have the same profit motivations as US banks.

Analysis, Economic aspects, Mergers, acquisitions and divestments, Bank mergers, Foreign banks

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Implementing FDICIA's mandatory closure rule

Article Abstract:

The last of the five procedures called for by the Federal Deposit Insurance Corp. Improvement Act of 1991 in its provision on prompt corrective action on errant banks is discussed. This crucial step involves the mandatory closure of a bank whose equity capital is below 2% of its aggregate assets. The implementation of this mandatory closure rule proved successful as the number of undercapitalized banks decreased.

Regulation, Licensing, and Inspection of Miscellaneous Commercial Sectors, Banking Regulation, Laws, regulations and rules, Panel Discussion, Banking law

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