Bank Consolidation, Internationalization, and Conglomeration: Trends and Implications for Financial Risk

Author/Editor:

Gianni De Nicolo ; Mary G Zephirin ; Philip F. Bartholomew ; Jahanara Zaman

Publication Date:

July 1, 2003

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper documents global trends in bank activity, consolidation, internationalization, and financial firm conglomeration, and explores the extent to which financial firm risk and systemic risk potential in banking are related to consolidation and conglomeration. We find that while there is a substantial upward trend in conglomeration globally, consolidation and internationalization exhibit uneven patterns across world regions. Trends in consolidation and conglomeration indicate increased risk profiles for large, conglomerate financial firms, and higher levels of systemic risk potential for more concentrated banking systems. We outline research directions aimed at explaining why bank consolidation and conglomeration do not necessarily yield either safer financial firms or more resilient banking systems.

Series:

Working Paper No. 2003/158

Subject:

Bank deposits Banking Commercial banks Emerging and frontier financial markets Financial institutions Financial markets Financial sector policy and analysis Financial services Insurance companies Systemic risk

English

Publication Date:

July 1, 2003

ISBN/ISSN:

9781451857603/1018-5941

Stock No:

WPIEA1582003

Pages:

44

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