Are the mergers predicated on economies of scope

Assignment Help Macroeconomics

Reference no: EM13213522

The year 1998 saw an unprecedented number of mega-mergers in the banking industry: NationsBank with BankAmerica, Bank One with First Chicago NBD, and Citicorp with Travelers Group, to name the three largest mergers. These merged entities are hoping to offer one-stop shopping for financial services: everything from savings to home mortgages, investments, and insurance.

a.) In the short run, what are the potential cost advantages of these mergers? Explain.

b.) Is a $300 billion national bank likely to be more efficient than a $30 billion regional bank or a $3 billion state-based bank? What economic evidence is needed to determine whether there are long-run increasing returns to scale in banking?

c.) Do you think the mergers are predicated on economies of scope?

Reference no: EM13213522

Questions Cloud

National culture committed to liberation of human spirit : How did American Intellectuals create a national culture committed to the liberation of the human spirit? What influence did they have on the efforts of the social reformers during the first half of the 19c?

Explain the correct formula for a reactant in an equation : after the correct formula for a reactant in an equation has been written , what can be changed to balance the equation?

Future cash flows of the company : To understand the financial profile of the selected company and to project future cash flows of the company, based on a business plan.

State the percent potassium notrate in the original sample : After the reaction was comlete, the volume of the dry has produced was 1 liters at 75 degrees celsuis and 721 torr. what was the percent potassium notrate in the original sample?

Are the mergers predicated on economies of scope : The year 1998 saw an unprecedented number of mega-mergers in the banking industry: NationsBank with BankAmerica, Bank One with First Chicago NBD, and Citicorp with Travelers Group, to name the three largest mergers.

Human behavior from a perspective : Dr. Sanchez approaches questions about human behavior from a perspective that emphasizes unconscious thoughts and conflicts within the individual, such as inner forces or conflicts. It is most likely that he accepts which of the following psychologic..

What is the value of checking deposits in pesos : In a hypothetical economy, the monetary aggregate M1 equals 120,000 pesos, and M2 equals 320,000 pesos. The following information about this economy is also available: Money market deposit accounts 80,000 Amount of currency held outside of banks.

What will happen on the island of monet in the short run : The equation of exchange is MV = PQ, where M is the money supply, V is the velocity of money, P is the price level, and Q is real GDP. The island economy of Monet is rather simple. The only good produced in Monet is "Things," and the island is abl..

Explain how much money would you spend on gas in one week : how much money would you spend on gas in one week if gas costs 1.10euros per liter and your car's gas mileage is 39.0mi/gal ? Assume that 1euro=$1.26 dollars.

User Account

All Pages