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The role of financial advisors in merger and acquisitions
This paper looks at the role of commercial banks and investment banks as financial advisors. Unlike some areas of investment banking, commercial banks have been allowed to compete directly with traditional investments banks in this area. In their role as lenders and advisors, banks can be reviewed as serving a certification function. However, banks as lenders and advisors also have a potential conflict of interest that may mitigate their certification function. Overall, it is found that the certification effect dominates the conflict of interest effect and that the certification effect is particularly strong when the target's own bank advises either the target or the acquirer.
AUTHORS: Jagtiani, Julapa; Allen, Linda; Saunders, Anthony
Do market react to bank examination ratings? evidence of indirect disclosure of management quality through BHCs' application to convert to FHC
AUTHORS: Allen, Linda; Moser, James T.; Jagtiani, Julapa
Incentives to engage in bank window-dressing: manager vs. stockholder conflicts
AUTHORS: Saunders, Anthony; Allen, Linda
Bank size, collateral, and net purchase behavior in the federal funds market: empirical evidence a note
AUTHORS: Allen, Linda; Saunders, Anthony; Peristiani, Stavros
The role of bank advisors in mergers and acquisitions
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.
AUTHORS: Allen, Linda; Peristiani, Stavros; Jagtiani, Julapa; Saunders, Anthony