Fed's Meyer Calls for Looser Restrictions on Bank Mergers

American Banker, January 5, 1999 | Go to article overview

Fed's Meyer Calls for Looser Restrictions on Bank Mergers


By SEIBERG, JARET

Federal Reserve Board Governor Laurence H. Meyer urged the government Monday to move more aggressively to remove impediments to bank and cross-industry mergers.

"Unless there are further actions, the remaining regulations likely will continue to restrain consolidation and integration activity significantly," Mr. Meyer said.

While praising the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 for lifting some barriers, Mr. Meyer noted that the law imposes deposit caps that may force some banks to walk away from mergers. The law generally prevents any bank from controlling more than 10% of domestic deposits or 30% of deposits in any state.

"This cap is close to binding on some organizations and may make it difficult to have deposit-taking branching operations in all 50 states," he told the North American Economic and Finance Association.

Existing laws also make it tougher for banks to diversify into new lines of business, he said. For instance, banking companies are generally barred from underwriting insurance, he said.

The House last year passed a financial reform bill that would have allowed banks, securities, and insurance firms to buy each other, but the Senate failed to act. Passage of a bill this year is questionable.

Mr. Meyer said the market-not the government-should decide whether mergers make sense. "We should allow banks to take advantage of perceived opportunities to increase profitability by improving efficiency, and leave it to the market to discipline errors in this regard," he said.

The government should intervene only if an in-market deal significantly reduces competition, he said. "Our basic policy should be-and is-to deny or alter mergers and acquisitions that appear likely to result in substantial increases in local market power," he said.

Regulators also need to revamp how they judge local market competition, he said. Consumers are increasingly using the Internet to bank with out-of- market institutions, or turning to nonbank financial companies for loans and investments, he said. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Fed's Meyer Calls for Looser Restrictions on Bank Mergers
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.