Date of Award


Document Type

Honors Thesis

Degree Name

Bachelor of Arts




The U.S. financial services industry’s gains are generally soaring these days in light of impending deregulation and lower taxes for their clients as well as for themselves, but have they really emerged from the long shadow cast by the global financial crisis? This paper attempts to examine this issue focusing on two aspects of mergers and acquisitions in the U.S. financial services industry: the wealth effects and the merger premiums. Based on a sample of over 2,500 mergers and acquisitions deals completed during the period 2004 through 2016 and using the event study methodology, this study finds that target shareholders continued to post significant gains throughout the crisis period though the number of deals declined dramatically. Bidding firm shareholders went from posting significant but low negative returns to insignificant returns with the number of deals declining dramatically too. Based on a sample of 210 deals, panel regressions used to identify the determinants of merger premiums find the method of payment and product diversification (bank acquiring nonbanks) to be significant determinants before the crisis but not so post-crisis. The study’s preliminary findings suggest that merger premiums and consolidation in the industry continue to bemotivated by economies of scale and scope.