MERGERS AND ACQUISITIONS AFTER THE FINANCIAL CRISIS

Mergers and Acquisitions after the Financial Crisis in the Arabia Gulf Region

Perspective

Abstract

In this study we try to explore the concept of “Mergers and Acquisitions” in a holistic context. The main focus of the research is on “Mergers and Acquisitions” and its relation with “Financial Crisis”. The research also analyzes many aspects of “Mergers and Acquisitions” and tries to gauge its effect on “Financial Crisis”. Finally the research describes various factors which are responsible for “Mergers and Acquisitions” and tries to describe the overall effect of “Mergers and Acquisitions” on “Financial Crisis”

Table of Contents

Chapter1: Introduction1

Problem statement2

Research Aims and Objectives2

Chapter 3: Methodology7

Research Design7

Chapter 4: Proposed Outcomes8

Bibliography10

Chapter1: Introduction

Problem statement

Why has the financial crisis had an adverse impact on the mergers and acquisition in the Gulf States?

The argument on which this study is going to be based is “What was the contribution of the financial industry consolidation to the global financial crisis?”

The history of the global the financial industry from the 1990s through the financial crisis of 2007-2008 has been one of increasing consolidation among top-tier global financial firms. During this period, many of the world's largest financial firms adopted the goal of becoming 'universal banks' with investment, commercial, and retail operations in every country, in the world. While this sort of consolidation can produce efficiencies and economies of scale it was also blamed for contributing to the financial crisis: first, by increasing systemic risk (that is, the risk that the failure of one bank would endanger the entire financial system) , and second, because being 'too large to fail' acted as an implicit insurance policy, creating moral hazard - in other words, the largest banks knew they would be bailed out if they became insolvent, so they took greater risks than they otherwise would have .

The role of the financial industry consolidation in causing or exacerbating the financial crisis, while still debated by academics, has led to calls (particularly in countries where banks received large bailouts from taxpayers) to break up the 'too big to fail' banks in practice, however, the financial crisis has actually led to even greater concentration, as government encourage large banks to absorb their failing competitors. Still, it seems likely that once the crisis is past, regulators will look much more carefully at the systemic risk and counterparty risk implications of a large bank merger in the future.

Research Aims and Objectives

The research objectives of this dissertation are to answer the following key research questions:

What was the contribution of the financial industry consolidation to the global financial crisis?

How does the financial industry consolidation increase risk, particularly systemic risk?

What are the potential benefits of the financial industry consolidation?

What is the most effective method of balancing the risks and opportunities of the financial industry consolidation for Gulf Co-operation Council countries?

What regulatory and legal tools are available to Gulf state regulators to mitigate the risks identified?

What regulatory or legal constraints exist that could limit options for responding the risks posed by the financial industry consolidation?

How effective ...