Pooled Interests Link Bank Mergers: Observers Wonder
Financial Times (10/05/00) Vol. 104, No. 40 p.36; Larsen, Peter Thal; Wiggins, Jenny

The U.S. banking sector has seen a resurgence of mergers, as US Bancorp acquired Firstar, FleetBoston acquired Summit, Citigroup acquired Associates, and Chase Manhattan acquired J.P. Morgan. While all of these transactions are quite different, the one thing they all have in common is that they are all being treated as a pooling-of-interests. Considering the fact that the pooling-of-interests accounting method could soon be phased out, as proposed by the Financial Accounting Standards Board, some observers wonder if these recent mergers have been influenced by accounting logic as much as they have been influenced by industrial logic. While Jack and Jerry Grunhofer, brothers and soon to be chairman and chief executive of Firststar-US Bancorp, deny that their decision to merge has anything to do with the possible termination of pooling, other bankers said accounting certainly has played a part in the recent transactions.

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