If Mergers Were Simple, Banking's Troubles Might Be Over

But protests from special interests and squabbling among bankers often poison potential unions

For years, executives at First Interstate Bank System of Montana Inc. and Commerce Bancshares Inc. debated the merits of a merger. Linking First Interstate's seven banks with Commerce Bancshares, across the state line in Sheridan, Wyo., would create a bigger, more efficient network. Combining back offices would also cut costs. And working out the merger seemed a cinch. The two privately held banks shared many of the same family stockholders and a few top executives. After clearing state regulators, the banks expected a swift approval when they filed a merger application in September, 1989, with the Federal Reserve Bank in Minneapolis.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.