--%>
Assignment Help - homework help

Describe the wave of mergers in the banking industry

Describe the wave of mergers in the banking industry?
Many economic factors have caused banking institutions to merge over the past various years. What are these factors comprise Please explain breifly...

E

Expert

Verified

• Greater efficiency. Banks frequently are able to operate more cost efficiently by increasing their size. The costs of numerous functions don't double while the scale of operation doubles. Therefore mergers are one way to keep costs and prices down.

• Leveraging technology. Banks & their customers have become accustomed increasingly to the advantages of new and costly technologies. Lots of technologies are too costly unless costs can be spread over a large number of customers. Mergers are frequently necessary to allow banks to introduce & maintain the technologies customers demand increasingly.

• Changing laws. Laws which had prevented several banks from operating in more than one state recently have been eliminated or overridden. The advent of interstate banking and branching means more chance for banks operating in distinct states to merge with each other.

• Diversification. One effective means of controlling risks inherent in bank lending is to diversify operations across distinct geographic regions and different kind of customers. Mergers can help diversify such risks.

• Broader array of products. Mergers may give banking institutions chance to offer a broader array of services. A merger of two banks along with different expertise can result in a combination more to the liking of customers looking for one-stop shopping.

 

   Related Questions in Microeconomics

  • Q : Securing financing by selling stock Can

    Can someone please help me in finding out the precise answer from the following question. One of the reasons that some new corporations secure much financing by selling the stock is that: (1) Financial investors form higher rates of return from the bond interest than

    		•
  • Q : Determine the relationship among APC

    Determine the relationship among APC and APS? Answer: APC + APS = 1.

    		•
  • Q : Define Price discrimination Price

    Price discrimination: The Price discrimination is a situation whenever a monopolist charges distinct price from various buyers of the similar product. This is usually done to maximize profits.

    		•
  • Q : Example of an explicit cost Which of

    Which of the given below is an example of the explicit cost? (i) The owner’s time. (ii) Depreciation on company owned truck. (iii) The interest which could be earned when some of the owner’s funds was not tied up in business. (iv) Salaries paid to the empl

    		•
  • Q : Limit Pricing Strategy When an

    When an incumbent firm uses an edge pricing strategy: (w) this can maximize short run profits and discourage entry in the market. (x) this may not be maximizing short run profits, but this can make positive economic profits over the long run. (y) the

    		•
  • Q : Define marginal revenue Marginal

    Marginal revenue: This is the change in total revenue by selling one more or a lesser amount of unit of commodity.

    		•
  • Q : Words of Joseph A. Schumpeter about

    Joseph A. Schumpeter popularized and refined the concept that profits: (i) ultimately derive primarily from innovation. (ii) are necessary compensation to entrepreneurs for bearing uncertainty. (iii) are reduced by bureaucratic inefficiencies in firms

    		•
  • Q : Experiencing the Diminishing Marginal

    James has watched a latest blockbuster film twice a week for the precedent three weeks and can now narrate most of the dialogue. He is probably starting to experience: (1) Disequilibrium. (2) Diminishing the marginal utility. (3) Diminished capacity. (4) Clinical depr

    		•
  • Q : Demands for Labor-Trade off work The

    The demands for labor mainly based on LEAST on the levels of: (i) Labor productivity. (ii) Technology and amounts of other resources used. (iii) Demand for the final products. (iv) Trade-off between work (producing income) and free time.

  • Q : Explain about term market failure The

    The phrase "market failure" refers to: (w) the failure of market economies to deal with social problems. (x) the Stock Market Crash of 1929. (y) cases where supplies and demands within private markets yield inefficiency, excessive or inequity instabil

    		•