--%>
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 : Estimate price by price elasticity of

    At the point on the demand curve for RoboMaids where the price elasticity of demand is unitary, the price would be roughly: (i) $10,000, resulting in sales of roughly 16,000 robots monthly. (ii) $13,000, resulting in sales of approxim

    		•
  • Q : Company Unions-tools for managers Can

    Can someone please help me in finding out the accurate answer from the following question. Unions which act primarily as the tools for managers of a firm are termed as: (1) Managerial unions. (2) Company unions. (3) Wildcat unions. (4) Union-busters.

    		•
  • Q : Long-run equilibrium price and output

    Long-run output and equilibrium price combinations describe a purely competitive industry’s: (w) demand curve. (x) long-run supply curve. (y) expansion path. (z) contract curve. I need a good answer on the to

    		•
  • Q : Long-run supply curve in industry When

    When Christmas trees are a constant cost industry and such firm is typical, in that case the industry’s long-run supply curve is curve that is: (w) A. (x) B. (y) C. (z) E.

    Q : Ownership shares in corporation I have

    I have a problem in economics on Ownership shares in corporation. Please help me in the following question. The Ownership shares in a corporation are termed as: (1) Bonds. (2) Entrepreneurial capital. (3) Common stock. (4) Total worth. (5) Retained equity.

  • Q : Shutdown point in minimum revenue for

    The minimum revenue which will induce a firm to produce a specified output in place of shutting down into the short run is the: (a) maximum such consumers are willing to pay for that output. (b) total variable cost of producing such output. (c) short-

    		•
  • Q : Simultaneously and automatically

    When fear that giant firms will default onto their debts drives down the prices of corporate bonds, in that case: (w) established corporations will rely more heavily onto sales of stock to secure funds. (x) interest rates onto these bonds increase sim

    		•
  • Q : Output level on marginal revenue and

    When the firm produced at output level q2, this produced where: (w) MR = MC. (x) MR > MC. (y) MR < MC. (z) P < MC.

    Q : Present value of future payments When

    When interest rates rise, in that case the present value of future payments will: (w) fall. (x) rise. (y) remain the same. (z) depend onto the transactions demand for money. How can I solve my Economics

  • Q : Higher prices of good-Substitution The

    The demand for Toyota Corollas will rise in response to: (i) Higher prices for Honda Civics. (ii) The decrease in price of steel. (iii) Honda offering enormous discounts to probable buyers. (iv) Technological progress for designing a car. (v) Higher safety ratings for

    		•