Market Response to Announcements of Mergers of Canadian Financial Institutions
Multinational Finance Journal, 2005, vol. 9, no. 1/2, pp. 72-98 | https://doi.org/10.17578/9-1/2-4
SSebouh Aintablian, Lebanese American University, Lebanon
Gordon S. Roberts, York University, Canada
Abstract:
This study examines a sample of mergers of Canadian Financial Institutions during the 1990’s to determine whether in-pillar, cross-pillar and foreign mergers are value-enhancing, and to determine possible sources of synergies behind those mergers. It develops testable hypotheses for Canadian FI mergers by synthesizing prior U.S. tests in the context of Canadian institutional arrangements. The overall results support the generality of findings of prior U.S. studies that the average abnormal return for both the acquiring and target firms is positive and statistically significant. This result suggests that acquisitions in the financial industry are, in Canada as elsewhere, driven by value-maximizing motivations. The study also shows that acquiring institutions’ shareholders benefit more when the acquisition is of a similar type (in-pillar) and domestic.
Keywords: Bank merger announcements; Canada
Citation (Format 1)
Aintablian, Sebouh, and Gordon S. Roberts, 2005, Market Response to Announcements of Mergers of Canadian Financial Institutions, Multinational Finance Journal 9, 72-98.
Citation (Format 2)
Aintablian, S., Roberts, G., 2005. Market Response to Announcements of Mergers of Canadian Financial Institutions. Multinational Finance Journal 9, 72-98.
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Effect of Monetary Policy on Commercial Banks Across Different Business Conditions
Multinational Finance Journal, 2005, vol.9, no.1/2, pp. 99-128 | https://doi.org/10.17578/9-1/2-5
Syed M. Harun, Texas A&M University-Kingsville, USA
M. Kabir Hassan, University of New Orleans, USA
Tarek S. Zaher, Indiana State University, USA
Abstract:
The objective of the paper is to investigate whether the stock price reactions of commercial banks to monetary policy actions are dependent on the state of the economy. The results indicate that monetary policy actions have asymmetric effects on the returns of commercial banks across different monetary policy and business environments. The asymmetric effects can primarily be attributed to the asymmetric effects of monetary policy on discount rates across different monetary and business environments. We also observe that the impact of monetary policy on the returns of commercial banks is affected by bank-specific characteristics. Bank size, leverage and profitability play an important role in explaining the cross-sectional variation in bank returns as a result of monetary policy changes. We find that cross-sectional bank-specific characteristics affect the bank returns asymmetrically as a result of monetary policy changes across different business conditions. The results suggest that the effectiveness of monetary policy depends on the states of the economy.
Keywords: Monetary policy; commercial bank; business condition
Citation (Format 1)
Harun, Syed M., M. Kabir Hassan, and Tarek S. Zaher, 2005, Effect of Monetary Policy on Commercial Banks Across Different Business Conditions, Multinational Finance Journal 9, 99-128.
Citation (Format 2)
Harun, S., Hassan, M., Zaher, T., 2005. Effect of Monetary Policy on Commercial Banks Across Different Business Conditions. Multinational Finance Journal 9, 99-128.