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The Banking Structure in Evolution: A Response to Public Demand
Excerpt from The Banking Structure in Evolution
The third means by which government in?uence the banking structure is through direct administrative control of mergers. In the unregulated industries mergers may be freely undertaken, subject only to prosecution under the antitrust laws. In banking, however, mergers require the prior administrative approval of a regulatory authority, and the regulatory agencies in reaching their decisions apply a variety of statutory criteria relating to the banking and public consequences of proposed mergers. The desire to merge is critically affected by the power to branch. Merger applications rarely appear in no-branch States because a merger under those conditions usually requires the closing of one of the merged banks. Thus, two tools of structure control are effectively lost where branching is prohibited, and needed bank expansion must take place almost eu titely through new charters.
The third means by which government in?uence the banking structure is through direct administrative control of mergers. In the unregulated industries mergers may be freely undertaken, subject only to prosecution under the antitrust laws. In banking, however, mergers require the prior administrative approval of a regulatory authority, and the regulatory agencies in reaching their decisions apply a variety of statutory criteria relating to the banking and public consequences of proposed mergers. The desire to merge is critically affected by the power to branch. Merger applications rarely appear in no-branch States because a merger under those conditions usually requires the closing of one of the merged banks. Thus, two tools of structure control are effectively lost where branching is prohibited, and needed bank expansion must take place almost eu titely through new charters.
354 pages, Paperback
Published August 24, 2018
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