Home About Latest Browse RSS Advanced Search

Federal Reserve Bank of New York
Staff Reports
The role of bank advisors in mergers and acquisitions
Linda Allen
Julapa Jagtiani
Stavros Peristiani
Anthony Saunders
Abstract

This paper looks at the role of both commercial and investment banks in providing merger advisory services. In this area, unlike some areas of investment banking, commercial banks have always been allowed to compete directly with investment banks. In their dual role as lenders and advisors to firms that are the target or the acquirer in a merger, banks can be viewed as serving a certification function. However, banks acting as both lenders and advisors face a potential conflict of interest that may mitigate or offset any certification effect. Overall, we find evidence supporting the certification effect for target firms. In contrast, conflicts of interest appear to dominate the certification effect when banks are advisors to acquirers.


Download Full text
Download Full text
Cite this item
Linda Allen & Julapa Jagtiani & Stavros Peristiani & Anthony Saunders, The role of bank advisors in mergers and acquisitions, Federal Reserve Bank of New York, Staff Reports 143, 2002.
More from this series
JEL Classification:
Subject headings:
Keywords: Banks and banking ; Bank mergers
For corrections, contact Amy Farber ()
Fed-in-Print is the central catalog of publications within the Federal Reserve System. It is managed and hosted by the Economic Research Division, Federal Reserve Bank of St. Louis.

Privacy Legal