The oldest bank in the world still in existence is Banca Monte dei Paschi di Siena, headquartered in Siena, Italy, which has been operating continuously since 1472 and has not been merged with any bank since inception.
In Ghana, the Bank of the British West Africa and Barclays Banks (a merger of the Anglo-Egyptian Bank and the National Bank of South Africa) were the only banks operating in the Gold Coast between 1920 and 1950 or thereabout until the Ghana Commercial Bank was created in 1953 as the first indigenous bank meant to introduce competition and reduce control of the financial industry by the foreign banks.
However soon after gaining independence in 1957, the Bank of Ghana was established to take control over the management of the country’s currency. By the mid 70’s, National Investment Bank, Agricultural Development Bank, Bank for Housing and Construction, Merchant Bank, the Social Security Bank and others have also emerged providing essential services required by Ghanaians in all parts of the country.
Causes of Banking Crises
Banks can fail for dissimilar reasons. For example, a bank run, which happens when many people try to withdraw their deposits at the same time, leading to a bank panic which can result in a total banking crisis. This merely means that, the free capital in the banking system is withdrawn and can lead to total collapse.
Mergers
Several academic studies have emerged to examine merger-related gains in banking and these studies have adopted one of the two following competing approaches. The first approach relates to evaluation of the long- term performance resulting from mergers by analysing the accounting information such as return on assets, operating costs and efficiency ratios. A merger is expected to generate improved performance if the change in accounting-based performance is superior to the changes in the performance of comparable banks that were not involved in merger activity.
Internationally, voluntary mergers and acquisitions have become a major way of corporate restructuring and the financial services industry has also experienced merger waves leading to the emergence of very large banks and financial institutions. The key driving force for merger activity is severe competition among firms of the same industry which puts focus on economies of scale, cost-efficiency, and profitability. The other influence behind bank mergers is the “too big to fail” belief followed by the authorities in charge of the financial sector. In some European countries like Germany, […]
