The role of takeovers in increasing efficiency

Article Abstract:

A nonparametric programming approach was used to estimate the increase in corporate efficiency resulting from impending takeovers. Data on 578 banks from different states were analyzed. Efficiency was measured by examining the inputs of labor, capital and loanable funds while the outputs were real estate loans, commercial loans, consumer loans, demand deposits and securities. It was concluded that the management of banks which are the target of takeovers improve their efficiency to lessen the possibility of takeovers.

Commercial Banks, Commercial Banking, Research, Acquisitions and mergers, Industrial efficiency, Economic efficiency

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Sources of panics: evidence from the weekly data

Article Abstract:

A study was conducted to examine possible sources of banking and financial panics. Weekly data from 1867-1933 are applied for theanalysis. Results show that although a panic's definite starting date is unpredictable, conditions which generate them are easily discovered. The absence of liquidity in financial markets is a primary source of panic. In addition, the Aldrich-Vreeland Act was established to be a effective control method for panic.

Analysis, Financial markets, Economic indicators

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The dual role of demand deposits under asymmetric information

Article Abstract:

Banks may glean private information concerning credit-worthiness of potential borrowers from their use of other bank activities, such as how much liquidity a depositor maintains, if he overdraws his account, etc. The information advantage enjoyed by banks over other lenders can be used by the bank to charge higher loan rates to risky borrowers and compete for the loan business of safe borrowers by offering lower rates.

DEPOSITORY INSTITUTIONS, Bank deposits

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