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Journal Article
Divestiture: a prescription for healthy competition
Our anti-trust laws dictate that bank mergers be rejected if they will substantially lessen competition in their markets. Yet bigger bank mergers are approved every year. What's going on? One word: divestiture.
Journal Article
Agencies explain screening of bank acquisitions
Journal Article
Antitrust policy and vertical mergers
Recently, federal regulators responsible for enforcing the antitrust laws have shown a renewed interest in the potential anticompetitive effects of vertical mergers--mergers between two independent firms in successive stages of production. This greater activism in vertical merger cases is in striking contrast to the permissive policies that prevailed throughout the 1980s, which, in turn, were a response to the Justice Department's and the Federal Trade Commission's open hostility to vertical mergers during the 1960s and 1970s.> The cyclical antitrust treatment of vertical mergers over the ...
Journal Article
Tie-in sales and banks
Working Paper
Divestiture as an antitrust remedy in bank mergers
The purpose of this study is to determine whether, from a public policy standpoint, divestitures constitute an effective antitrust remedy in bank merger cases. A number of findings emerge from the study: Divested branches have a remarkable survival record; structural changes effected by divestitures tend to persist over time; larger buyers of divested branches tended to be more successful than smaller buyers; divestiture of the target institutions' branches rather than those of applicants proved preferable from an antitrust standpoint; and divested branches selected by the Department of ...
Working Paper
Market definition and the analysis of antitrust in banking
In antitrust analysis of bank mergers, banking markets are viewed as geographically local, with a "cluster" of products as the relevant product line. This view is criticized as outdated, now that many bank products are offered by nonbank institutions and financial institutions' operations are increasingly national in scope. This paper reexamines the question of market definition in banking, using two micro data sets uniquely well-suited to the task. We find that local depositories remain the dominant supplier of key financial services to households and small businesses, with geographic ...