NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Joao Granja

Booth School of Business
University of Chicago
5807 S. Woodlawn Avenue
Chicago, IL 60637-1610

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NBER Working Papers and Publications

August 2014Selling Failed Banks
with Gregor Matvos, Amit Seru: w20410
We study the recent episode of bank failures and provide simple facts to better understand who acquires failed banks and which forces drive the losses that the FDIC realizes from these sales. We document three distinct forces related to the allocation of failed banks to potential acquirers. First, a geographically proximate bank is significantly more likely to acquire a failed bank: only 15% of acquirers do not have branches within the state. Sales are more local in regions with more soft information. Second, a failed bank is more likely to be purchased by a bank that has a similar loan portfolio and that offers similar services, highlighting the role of failed banks' asset specificity. Third, low capitalization of potential acquirers decreases their ability to acquire a failed bank and po...

Published: JOÃO GRANJA & GREGOR MATVOS & AMIT SERU, 2017. "Selling Failed Banks," The Journal of Finance, vol 72(4), pages 1723-1784.

 
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