From the Washington
Post:
The crisis may be turning out very well for many of the behemoths that dominate U.S. finance. A series of federally arranged mergers safely landed troubled banks on the decks of more stable firms. And it allowed the survivors to emerge from the turmoil with strengthened market positions, giving them even greater control over consumer lending and more potential to profit.
. . .
Officials waived long-standing regulations to make the deals work. J.P. Morgan Chase, Bank of America and Wells Fargo were each allowed to hold more than 10 percent of the nation's deposits despite a rule barring such a practice. In several metropolitan regions, these banks were permitted to take market share beyond what the Department of Justice's antitrust guidelines typically allow, Federal Reserve documents show.
. . .
Large banks with more than $100 billion in assets are borrowing at interest rates 0.34 percentage points lower than the rest of the industry. Back in 2007, that advantage was only 0.08 percentage points, according to the FDIC.
The article discusses in some detail two concerns stemming from banking industry concentration: lack of consumer choice and moral hazard.
The Wall Street Journal tells a similar tale in Halting Recovery Divides America in Two:
The U.S. recovery is a tale of two economies.
At one extreme of Corporate America is a cadre of companies and banks, mostly big, united by an enviable access to credit. At the other end are firms, chiefly small, with slumping sales that can't borrow or are facing stiff terms to do so.
Meanwhile, on Friday, three more banks demonstrated that they are not too big to fail. Bradford Bank, Baltimore, Maryland; Mainstreet Bank, Forest Lake, Minnesota; and Affinity Bank, Ventura, California were all closed by the FDIC, bringing the total for the year to 84. See here for the FDIC's full list of failed banks since October 1, 2000.
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Failures,
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Bank Failures Update and Future Problem Banks
Bank Failures in Historical Perspective
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