Do “White Knights” Make Excessive Profits in Bank Resolution?

This paper finds that accounting gains to acquirers in bank resolutions in the EU are comparable to those in recent transactions in other major banking markets. Accounting gains for acquirers are shown to be lower in transactions involving relatively bigger acquirers. This suggests that resolution authorities should aim to tie distressed banks to relatively larger acquirers to reduce resolutions costs. This document was provided/prepared by the Economic Governance and EMU Scrutiny Unit at the request of the ECON Committee.