Washington, D.C. – The Bank Policy Institute today submitted a statement for the record to the Senate Banking Committee’s Subcommittee on Economic Policy for today’s hearing entitled “Bank Mergers and the Economic Impacts of Consolidation.” Bank M&A enables scale that benefits consumers, and the need for clear bank merger policy that supports a robust banking system is more salient in light of recent banking stress, BPI said in the statement.
Just as taking preventive steps to strengthen a healthy patient is preferable to emergency surgery, mergers between healthy banks are better than eleventh-hour transactions in a failure. Openness to bank M&A among top policymakers is necessary to ensure the banking system remains healthy even under stress and continues to meet the needs of customers.
It is encouraging to see some policymakers expressing openness to bank M&A, but this message conflicts with signals from other officials, the statement said. In addition to acknowledging the potential benefits of M&A, policymakers should provide clear expectations and timelines for merger approvals, as lengthy delays can impose tangible costs on bank customers, employees and investors, it said.
Bottom line: “We encourage the Subcommittee to consider the economic benefits of bank M&A and the costs of precluding it,” the statement said. “A predictable path forward for bank mergers promotes a healthier banking system and a more stable U.S. economy.”
To read the full statement, click here.
Learn more about our work on M&A:
- The Branch Destruction Fiction, Part II
- The Branch Destruction Fiction, Part I
- Banks’ Ability to Scale is a Benefit, Not an Inherent Problem
- Our Search for an Urban Banking Market Made Less Competitive by a Banking Merger
- Banks Thrive at Scale, and So Do Consumers
- To Serve Communities, Banks Need the Ability to Grow
- On Bank Mergers, the Benefits of a Competitive Industry are Clear and the Regulatory Standards Are Appropriately Stringent
- Exposing Some Serious Untruths About Bank Mergers, Bank Branches and Banking Access
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About Bank Policy Institute.
The Bank Policy Institute (BPI) is a nonpartisan public policy, research and advocacy group, representing the nation’s leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.
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