Keywords: Banks, insurance, securities firms, mergers, efficiency, international finance
Abstract: We examine the efficiency effects of the integration of the financial services
industry and suggest directions for future research. We also propose a
relatively broad working definition of integration and employ U.S. and European
data on financial service industry M&As to illustrate several types of
integration. The analysis suggests that there is a large potential for
efficiency gains from integration, but only a relatively small part of this
potential may be realized. Integration appears to bring about larger revenue
efficiency gains than cost efficiency gains, and most of the gains appear to be
linked to benefits from risk diversification.
Full paper (135 KB PDF)
| Full paper (1601 KB Postscript)
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Last update: August 8, 2000