Protecting Our Communities from Banking Mega-Mergers
Public Deposited- Creator
-
Schlesinger, Tom
- Other Affiliation: Director, Southern Finance Project, Charlotte, NC
- Abstract
- The banking industry mega-mergers announced last July and August are unprecedented in size. Analysts say others will surely follow. Many of the same analysts reassure us that huge banking combinations and industry- wide consolidation are natural, inevitable, good for banking and good for the economy. The Bush Administration asserts that encouraging big banks to get bigger will level the financial industry's domestic playing field and enhance the global position of U.S. banks. Rather than leveling the playing field, this bank-centered approach will only preserve its tilt. Underregulated firms, particularly giant financial companies, will continue playing a disruptive, lowest-common-denominator role at the fringe of the credit system. The bigger-is- better solution won't lay a glove on the underlying reasons the financial industry and lenders of all sizes flocked to ill-considered speculative investments over the past decade. The real culprits are regulatory inequality, weak supervision and decontrolled interest rates - not "too many banks." There is little evidence that increased size will make U.S.-based banks more competitive in global markets - or that such a result might yield benefits in this country. For example, the proposed NationsBank merger will produce the largest bank in recent U.S. history to have virtually no international presence. In addition to our skepticism about banking consolidation, the industry mega-mergers announced this summer raise three specific concerns: financial instability, economic dislocation, and concentration of economic power.
- Date of publication
- 1991
- DOI
- Resource type
- Article
- Rights statement
- In Copyright
- Journal title
- Carolina Planning Journal
- Journal volume
- 17
- Journal issue
- 2
- Page start
- 6
- Page end
- 11
- Language
- English
- Digital collection
- Carolina Planning Journal
Relations
- Parents:
- In Collection:
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