3 'superbanks' now dominate industry - Economy in Turmoil- msnbc.com:
Some visual bites:
“Large institutions are impossible to manage prudently, let alone regulate,” says Amar Bhide, a professor at the Columbia Business School.Now in fairness this consolidation had started LONG before the current crisis. For instance
In fact, existing federal banking laws say that no bank can have more than 10 percent of the domestic deposit market — a threshold recently surpassed by all three superbanks.
When asked whether the government would take any action, a Justice Department official was noncommittal."
"...the number of commercial banks and savings & loans in the United States has fallen in the past 20 years to 8,451 as of June, compared to 16,574 in 1988, according to FDIC data."and as the article points out, this may be the lesser of two evils:
"Gregory F. Udell, Chase Chair of Banking and Finance at the Indiana University Kelley School of Business.
The risk of creating monopolies, he says, “is a lot less than the risk of having a lot of zombie institutions out there.”"
On the monopoly issue, one thing not mentioned is the idea that due to technology, small banks can at least provide the threat of competition.