A Report On Mergers And Acquisitions

The banking industry has undergone major upheaval in recent years, largely due to the lingering recessionary environment and increased regulatory environment. Many banks have failed in the face of such tough environmental conditions. These conditions

This necessitated the need for development of regulatory measures for the industry. Bank regulation is a legal structure by which all financial

By allowing banks to become “too big to fail”, the failure of one leads to massive repercussions for the entire economy. In a contrasting environment where many small institutions exist, the implosion of one bank will not have this far-reaching, catastrophic impact. In recent years, reforms have taken place that limit a company’s ability to be “too big to fail”. In the aftermath of the financial crisis of 2008, measures to revitalize the financial system included the Dodd-Frank Wall Street Reform and Consumer Protect Act of 2010, named after U.S Senator Christopher J. Dodd and U.S Representative Barney Frank. The Act aimed to increase regulation and transparency in an industry that had so clearly lacked them and minimize future risk in the

One of the principal functions of the Federal Reserve in achieving this goal is to regulate and supervise various financial entities. It performs this function, in part, through microprudential regulation and supervision of banks; holding companies and their affiliates; and other entities, including nonbank financial companies that the Financial Stability Oversight Council (FSOC) has determined should be supervised by the Board and subject to prudential standards. In addition, the Federal Reserve engages in “macroprudential” supervision and regulation that looks beyond the safety and soundness of individual institutions to promote the stability of the financial system as a

These bank mergers can generate a great number of advantages. First, the economy of scale is one advantage of the merger. The advantage of the economy of scale is the cost savings associated

• Governance and oversight: Assessing business model and strategy changes and reinforcing the importance of sound corporate governance appropriate for the size and complexity of the individual bank. A specific focus will be on determining the adequacy of strategic, capital, and succession planning. Examiners will assess whether the plan is appropriate in light of the risks in new products or services. If applicable, examiners will assess the bank’s merger and acquisition processes and procedures.

In this essay I will be addressing the “Too Big To Fail” (TBTF) problem in the current banking system. I will be discussing the risks associated with this policy, and the real problems behind it. I will then examine some solutions that have been proposed to solve the “too big to fail” problem. The policy ‘too big to fail’ refers to the idea that a bank has become so large that its failure could cause a disastrous effect to the rest of the economy, and so the government will provide assistance, in the form of perhaps a bailout/oversee a merger, to prevent this from happening. This is to protect the creditors and allow the bank to continue operating. If a bank does fail then this could cause a domino effect throughout

Restrictions on the number of new financial services institutions allowed to enter the industry each year are needed to protect the integrity and stability of consumers’ cash and deposits, as well as outstanding loans and credit. Although many are private companies, financial institutions have a very public purpose, which is why federal regulations are needed. The safety and security of the financial institution is an important part of the overall financial system. Federal guidelines with capital structure requirements and market entry limits protect consumers from losing their money or assets to institutions who are not adequately funded to maintain business through times of financial downturn (Northeast Decision Sciences Institute, 2013). Barriers to entry in the United States financial services industry is needed and necessary to protect the American consumer and the American financial market from both foreign and domestic financial services companies. Regulating the entry of new financial services companies, whether foreign or domestic-based, also helps establish a level playing field for new and existing companies within the regulatory system (McDonough, 1993).

The paper differs from others as it will provide insight and evaluation into which event during the merger process had the largest effect and identify whether this was the same for both firms, especially since the merger was undertaken in a tough regulatory environment which contains many “hurdles” (). The results of this paper could be attributed to other firms in the industry or, potentially, to other industries with similar regulatory structures.

As a result, policymakers, congressmen, local and international organizations, and governments would be able to use this work for the financial and banking reform. At the end, the purpose is bringing some balance between TBTF banks and small and

A merger is achieved when a company purchases the property of another firm, thus absorbing them into one corporate structure that retains its original identity.

Many believe that if a company is big enough, then it will be nearly impossible for it to fail and go bankrupt. However, that is not always the case as the United States learned the hard way in the late 2000s. This essay will describe what it means to be “too big to fail”, and explain the benefits of having large institutions along with the problems that come with them. It will also mention the amount of concentration in the banking industry, the size of the firms and the market share they represent. There have been proposed policies that can help reduce the risks of these large financial institutions. Some institutions however, have challenged proposed policies and decisions by the Financial Stability Oversight Council that declares them as a financial institution important enough to not fail. An explanation of their reasoning will be provided.

To know if this is actually followed the use of the Nigerian banking sector would be used to ascertain information on how internal

Objectives ( Obj ti (cont’d) ’d) To ensure the safety and stability of the banking system

Finally, it was recommended that The bank 's control system should be of high priority both at management and operational levels, the regulatory authorities have a responsibility of exposing staff to the dynamics of modern day banking operations, The level of punishment meted out to fraudsters is not commensurate enough to deter others from committing such crimes in the future. The penalties already in place should be reviewed. In this regard, a Nigerian version of the Sarbanes Oxley act must be enacted and since the most important resource of any organization is the human resource, there must be a standard audit department staffed with the best material in terms of knowledge, experience, human relations, integrity, dedication and commitment to the success of the bank.