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The Impact of Bank Consolidation on Credit Supply and Performance

Sergio Mayordomo et al.

The Review of Financial Studies2026https://doi.org/10.1093/rfs/hhaf107article
FT50UTD24AJG 4*ABDC A*
Weight
0.50

Abstract

Between 2009 and 2011, the Spanish banking system underwent a restructuring process based on savings banks’ consolidation. The program’s design allows us to study how banks’ consolidation affects credit supply and performance. We propose a quasi-experimental analysis showing that bank mergers restrict credit supply and set higher interest rates but also reject fewer applicants and report fewer nonperforming loans. We then estimate a structural model of credit in which banks set interest rates and lending standards. We find that, despite the relaxation in their lending standards, merged banks’ credit performance improved thanks to a significant drop in their screening costs.

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https://doi.org/https://doi.org/10.1093/rfs/hhaf107

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@article{sergio2026,
  title        = {{The Impact of Bank Consolidation on Credit Supply and Performance}},
  author       = {Sergio Mayordomo et al.},
  journal      = {The Review of Financial Studies},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1093/rfs/hhaf107},
}

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The Impact of Bank Consolidation on Credit Supply and Performance

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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