Lots of Banks Means Lots of Bank Mergers
Also CEO pay, APEs, WANdisco, Bridgewater robots, robot lawyers, Metro-North insider trading and Justin Bieber’s Bored Ape.
One conclusion that a lot of people have drawn from the 2023 crisis of US regional banks is that the US has way too many regional banks. There are more than 4,000 banks, which creates a lot of work for bank supervisors, and which means that it’s hard for depositors to be sure that their bank is safe. When depositors get nervous, they run to household-name too-big-to-fail banks, leaving the other, you know, 3,990 banks vulnerable.
One obvious solution to this problem is to turn those 4,000 banks into, say, 2,000 banks, or maybe 20 banks. That would make life easier for regulators and supervisors — fewer banks to keep track of — and also make each individual bank a bit bigger and more diversified and hopefully more robust.