--%>
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 : Quantity demands equivalent quantity

    These supply and demand curves for sugar propose that the: (1) demand price exceeds the supply price at quantity Q2. (2) technology should advance to allow output to develop to Q4. (3) quantity demanded equals quantity supplied at P1.

    		•
  • Q : Labor Union Goals The strategy which is

    The strategy which is most likely to yield the maximum wages and employment and the most economic clout for all the workers over long run would be for a union to: (i) Restrict entry to a specific occupation. (ii) Boycott non-unionized firms which compete with the unio

    		•
  • Q : Marginal revenue product of labor The

    The monopsonist will hire labor till the labor's marginal resource cost equivalents the: (1) Marginal revenue product of the labor. (2) Marginal physical product. (3) Value of average product of the labor. (4) Price of the labor. C

    		•
  • Q : How Accounting profits differ from

    Can someone please help me in finding out the accurate answer from the following question. The Accounting profits differ from economic profits in such a manner that: (1) Accounting profits take into account of opportunity costs, whereas economic profits take into acco

    		•
  • Q : Attract new firms by economics profits

    Economic profits within a competitive industry are signals which: (i) attract new firms into the industry. (ii) hinder innovation of new technologies. (iii) encourage inefficiency in existing firms. (iv) business conditions are deteriorating. (v) pric

    		•
  • Q : Purely-competitive long-run equilibrium

    The typical firm produces in a purely-competitive long-run equilibrium where price equals as: (1) short-run average cost. (2) marginal cost. (3) long-run average cost. (4) average revenue per unit. (5) All of the above.

    Q : Determine market demand in curve The

    The market demand curve as in demonstrated figure for Christmas trees is: (i) curve A. (ii) curve E. (iii) curve F. (iv) curve G. (v) curve J.

    Q : Find absolute value of the price

    Two thousand four hundred students subscribed to cable TV services while they enrolled like freshmen. 800 of them students dropped the service while the price of cable rose by $25 to $35 per month. The absolute value of the price elasticity of demand

    		•
  • Q : Maximize profit by manufacturing output

    All firms maximize profit by manufacturing output where is: (w) AC = MR. (x) MC = MR when maximum total revenue exceeds total variable costs. (y) MR is rising. (z) TR = TC. How can I solve my Economics

  • Q : Contestable Markets When consumers

    When consumers ultimately cannot distinguish one roasted chicken dinner from other, when roasted chicken dinners are produced within a constant cost industry, and when no barriers to entry or exit exist, in that case the long-

    		•