Regulatory learning in failed thrift auctions

We use a sample of failed thrift auctions to examine if regulators learn from early transactions and improve their performance in later transactions. Our findings suggest that experience at failure resolution does not by itself lead to improved regulatory performance. Evidence of regulatory learning...

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Bibliographic Details
Published in:Journal of banking & finance 2002-04, Vol.26 (4), p.651-669
Main Authors: Gupta, Atul, Misra, Lalatendu
Format: Article
Language:English
Subjects:
Acquisitions & mergers
Assisted mergers
Auctions
Banking
Finance
Financial mergers and acquisitions
Learning
Mergers
Purchase and assumptions
Regulation
Regulation of financial institutions
Regulatory agencies
Regulatory learning
Savings & loan associations
Studies
Thrift failures
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Summary:We use a sample of failed thrift auctions to examine if regulators learn from early transactions and improve their performance in later transactions. Our findings suggest that experience at failure resolution does not by itself lead to improved regulatory performance. Evidence of regulatory learning is restricted to dealings with repeat acquirers; in cases where an acquiring firm makes abnormal gains, regulators are able to restructure the auction process and eliminate such gains in subsequent acquisitions made by the same acquirers.
ISSN:0378-4266
1872-6372
DOI:10.1016/S0378-4266(01)00162-5