The research as defined examines M&A of the banking industry in both Dissertation

The research as defined examines M&A of the banking industry in both the US and EU banking industry - Dissertation Example On the date when an M&A are, announced stock prices normally jump abnormally from the acquiring bank to the target company (Banerjee & Cooperman, 2000). In addition, M&A’s which resulted into the creation of diversification of the business in which the banks operate resulted into very high returns. However, other M&A types resulted neither into creation nor into destruction of the shareholders’ wealth or share values. This is majorly due to the sole reason that stock prices alone cannot be used to depict the value that is created by a merger and acquisition. Therefore, Accounting performance technique and stock prices analysis will be employed to help in the understanding the likelihood of stability of value creation (Banerjee & Cooperman, 2000). There are various reasons for merger and acquisitions with value creation being the major or primary reason. Other cases present other banks to merge or acquire with the others if they consider the others as having potential fo r potential gains in the future. Some instances, partners to an M&A found themselves in the situation after they were salvaged from financial crisis hence M&A was a solution to their predicaments resulting into such companies being for good bargains once their financial problems are taken care of by the M&A arrangements. Considering that the banking industry is highly regulated, it is worthwhile to note that smaller banks could engage in mergers with larger banks to guarantee them their profitability. Those banks that intend to engage in acquisitions mostly consider the banks that they intend to acquire to be of greater value addition to them at some speculated future time (Amihud & Travlos, 1990). Therefore, there are a variety of financially motivating reasons why one bank may choose to engage into an M&A agreement with the other bank whether small or big. From research, it is quite evident that large scale M&A’s in the banking industry in the past have helped the banks out of stiff competition hence securing even a greater market share locally and abroad. Hence, apart from the fundamental reasons for M&A, one can rest assured that at least be sure that either of the parties will gain from such arrangements. In most of the cases, mutual benefits are realized with the new formed firm becoming more profitable. As typical reasons of starting banks for long-term profitability, some findings have it that some were created to be sold out for cash revenue to the owners. M&A to create larger banks in both the EU and the US have given room to drastic change in structure of the banking industry in the two regions (Amihud & Travlos, 1990). On whether these changes are good or bad is a large question to be answered on the long run through the consideration of the influences on the main players in the arrangements. This because shareholder value is only a single aspect of the value creation expected through the arrangements under M&A. in the methodology therefore, the study focuses through empirical analysis that mergers and acquisitions creates the value for shareholders in both the target and the acquirers of the banks that are involved. The data also conducts an examination of the reactions of shareholders when share prices are manipulated in relation to gains or losses created due to the instability (Banerjee & Cooperman, 2000). The data set to be used is that from two sources: that of Thomson One Banker M&A for data on the operations of M&A. the other source will be that of the non-involved banks as a control for

Necessary Leadership Alberto Fujimori Essay Example | Topics and Well Written Essays - 2000 words

Necessary Leadership Alberto Fujimori - Essay Example When Alberto Fujimori was elected President of Peru in 1990, the country was suffering from massive external debt which could not be paid, uncontrolled hyperinflation, non-existent international reserves, and food shortages (The World Bank, 1997). Basic government services like education, health, and basic infrastructure had been neglected and were eroding away. The government was perceived as weak, and two terrorists groups, Shining Path (Sendero Luminoso) and the MRTA (Movimiento Revolucionario Tupac Amaru), were competing for control of the country. Both of these groups had formed alliances with Peruvian drug dealers. Violence and intimidation were common, and law-biding Peruvians were very afraid of what the future might hold for their country and their lives. As one commentator noted, "The intense violence of the 1980s created a content in which many Peruvians were willing to cede citizenship and other rights to an extremely personalistic, authoritarian regime in exchange for or der and stability" (Jo-Marie, 2006 p32). Alberto Fujimori was the "extremely personalistic" and politically unknown candidate that was elected president in 1990. After his election, Fujimori vigorously attacked Peru's economic and crime problems. Even Fujimori's critics conceded that Fujimori's policies brought Peru's hyperinflation under control and got the nation's legal economy moving again (Jo-Marie, 2006).Critics also admit that it was under Fujimori that the leaders of Shining Path and MRTA were captured and the guerilla warfare that had characterized terrorist activity in Peru was virtually eliminated (Jo-Marie, 2006). At the same time, the Fujimori administration increased spending on social programs, built schools, repaired or created new infrastructure, and provided funds for community-based economic development (Jo-Marie, 2006). These were all necessary steps in correcting Peru's economic problems and making it safe from terrorists.Fujimori's actions, however, were severely criticized as an abuse of power by his political opponents and by those who saw his policies as violations of human rights. After being reelected to a third term in 2000 under questionable circumstances, Fujimori went into exile in Japan and eventually resigned as President (Peru's Fujimori Resigns, 2000). Since his resignation, additional charges of corruption, death squads, and other abuses of power have surfaced, leading the current Peruvian government to call for Fujimori's extradition from Japan so he may be tried on criminal charges in Peru (Judge Blocks Fujimori Extradition , 2007). AnalysisLeadership in Challenging Times Any reasonably competent elected official can lead during times of peace and economic prosperity, when the only real duty of government is simply not to do anything that would interfere with economic growth or destabilize the peace. Effective leaders can make the most of these opportunities; ineffective leaders allow circumstances to erode and lose the gains that were made during prosperous times. As noted above, Fujimori came into power at a time when Peru was enjoying neither peace nor economic success. Data from public opinion polls