Why are some banks recapitalized and others taken over?

This study investigates the likelihood of takeovers or recapitalizations for EU listed banks\r\nbefore and during the financial, using both static and sequential multinomial logistic models.\r\nTakeovers and recapitalizations are potential alternatives used to shore up financial institutions. We\r\nfind that takeovers occur when the bank has low net interest margins. Instead, private\r\nrecapitalizations occur for banks with lower equity, higher net interest margins, and positive growth\r\nat the bank level. Public recapitalizations occur for larger, less liquid banks with positive prospects\r\nthat operate in bigger banking systems. Both types of recapitalizations occur in countries with lower\r\ngrowth. The determinants for takeovers and recapitalization differ between the pre-crisis and crisis\r\nperiods. Overall, a need for corporate control exists when traditional banking suffers lower\r\nperformance, whereas the search for stability explains recapitalizations