Mergers as an Alternative to Liquidation: Legal Insights into Crisis Resolution in Banking

Abstract

This thesis aims to identify the most important regulations governing mergers and acquisitions (M&A) in the banking sector, and to explain how these operations can serve as alternative tools for managers or regulatory institutions to resolve a bank's crisis, thereby avoiding liquidation or restructuring. A mixed-method approach was adopted to conduct the research focused on the legal aspects of M&A transactions and highlighted four most important legal aspects necessary for bank mergers. Further, this study presents both European and American regulatory frameworks and develops a comparative view. Finally, this thesis examines one real case of two banks that successfully executed a merger. From a legal perspective, the analysis will provide insight into why the M&A operation was an efficient solution to improve the financial situation affecting one of the banks.