The consolidation of the financial services industry: causes, consequences, and the implications for the future

Allen Berger (), Rebecca Demsetz and Philip E. Strahan

No 55, Staff Reports from Federal Reserve Bank of New York

Abstract: This article designs a framework for evaluating the causes, consequences, and future implications of financial services industry consolidation, reviews the extant research literature within the context of this framework (over 250 references), and suggests fruitful avenues for future research. The evidence is consistent with increases in market power from some types of consolidation; improvements in profit efficiency and diversification of risks, but little or no cost efficiency improvements on average; relatively little effect on the availability of services to small customers; potential improvements in payments system efficiency; and potential costs on the financial system from increasing systemic risk or expanding the financial safety net.

Keywords: Consolidation and merger of corporations; Bank mergers; Financial services industry (search for similar items in EconPapers)
Date: 1998
New Economics Papers: this item is included in nep-cfn, nep-fmk and nep-ias
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Related works:
Journal Article: The consolidation of the financial services industry: Causes, consequences, and implications for the future (1999)
Working Paper: The consolidation of the financial services industry: causes, consequences, and implications for the future (1998)
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