An Economic Perspective of Big Banks
Posted: 9 Apr 2016
Date Written: April 7, 2016
Industry consolidation is a natural process that contributed to the concentration of a small number of large banks. They have both economies of scale and scope. More importantly, these globally systemically important banks (G-SIBs) provide a wide range of both domestic and international services and functions that are crucial to both our domestic and international trade that cannot be provided by smaller community banks. Simply stated, they have a global footprint that facilitates both our imports, exports, and payment systems. It is also important to note that some of the world’s largest foreign banks also have extensive operations in the United States.
Keywords: Banks, Break-up, Consolidation, Global, Mergers
JEL Classification: G21, G28
Suggested Citation: Suggested Citation