Discussion paper

DP14663 Value creating mergers – British bank consolidation, 1885-1925

The British banking sector had many small banks in the mid-nineteenth century. From around 1885 until the end of World War One there was a process of increasingly larger mergers between banks. By the end of the merger wave the English and Welsh market was highly concentrated, with only five major banks. News of a merger brought a persistent rise in the share prices of both the acquiring and the target bank (roughly 1% and 7%, respectively). Non-merging banks, especially those whose local market concentration rose as a result of the merger, saw their stock prices rise.


Braggion, F, N Dwarkasing and L Moore (2020), ‘DP14663 Value creating mergers – British bank consolidation, 1885-1925‘, CEPR Discussion Paper No. 14663. CEPR Press, Paris & London. https://cepr.org/publications/dp14663