The Role that the Formation of Regional Compact and the Development of Superregional Banks Played in Breaking Down Barriers to Interstate Banking in the US
Commercial bank consolidation in the US has been driven by a number of factors, including: Deregulation. Relaxation of laws restricting interstate banking in the 1980s and 1990s which allowed banks to expand across state lines, leading to mergers and acquisitions. Economies of scale. Larger banks can spread their costs over a bigger customer base, making them more efficient. Technological advancement. Online and mobile banking have reduced the need for physical branches, making consolidation more feasible. Competition. Banks face competition from non-traditional financial institutions, such as fintech companies, which can put pressure on profits and encourage consolidation. Regulatory changes. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 imposed some restrictions on banks mergers, but also raised the threshold at which regulatory scrutiny is triggered, making it easier for some l...