Bank Consolidation, Internationalization, and Conglomeration: Trends and Implications for Financial Risk
IMF Working Papers, July 1, 2003
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- Bank Consolidation, Internationalization, and Conglomeration: Trends and Implications for Financial Risk
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Bibliographic details
- Authors: Gianni De Nicolo, Mary G Zephirin, Philip F. Bartholomew, Jahanara Zaman
- Published: July 1, 2003
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451857603.001
Overview and authorship
- Title: Bank Consolidation, Internationalization, and Conglomeration: Trends and Implications for Financial Risk
- Authors: Gianni De Nicolo, Mary G Zephirin, Philip F. Bartholomew, Jahanara Zaman
- Publication date: July 1, 2003
- Series: Working Paper No. 2003/158
- Issue: 158
- Volume: 2003
- Pages: 44
- DOI: https://doi.org/10.5089/9781451857603.001
- ISBN: 9781451857603
- ISSN: 1018-5941
Key findings
- There is a substantial upward trend in conglomeration globally.
- Consolidation and internationalization display 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.
- The paper explores the extent to which financial firm risk and systemic risk potential in banking are related to consolidation and conglomeration.
Analytical focus and themes
- Documents global trends in:
- bank activity,
- consolidation,
- internationalization, and
- financial firm conglomeration.
- Investigates relationships between:
- financial firm risk, and
- systemic risk potential in banking,
in connection with consolidation and conglomeration.
- Outlines research directions aimed at explaining why bank consolidation and conglomeration do not necessarily yield either safer financial firms or more resilient banking systems.
Subjects and keywords (as provided)
- 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
- Keywords include: Africa, Bank Consolidation, Bank deposits, banking firm, banking system, choice of return, Commercial banks, conglomerate firm, Conglomeration, Eastern Europe, Emerging and frontier financial markets, emerging market, expansion of the scope, financial firm, Financial Risk, five-firms concentration ratios, Global, Insurance companies, Internationalization, investment strategies, Middle East, probability of failure, return on assets, risk profile, risk taking, risk-taking choice, Systemic risk, Western Europe, WP
Implications and research directions highlighted
- Consolidation and conglomeration trends signal potential increases in firm-level risk and system-wide vulnerability, particularly where banking systems become more concentrated.
- Further research is outlined to explain:
- why consolidation and conglomeration do not necessarily produce safer financial firms, and
- why they do not necessarily produce more resilient banking systems.
IMF Working Paper No. 2003/158 (Gianni De Nicolo et al., July 1, 2003).