Interstate banking is a relatively new thing in this country. This is why we have so many banks. The large number of small and mid-size banks is an anachronism dating back to the days when a bank wasn't allowed to buy another bank in a different state. It wasn't until the 1990s that legislation was passed to allow such purchases (the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994). Small and even midsized banks have been disappearing since passage of Riegle-Neal and will continue to disappear. They don't have the scale to be efficient in the era of interstate banking.
Countries that have not had such barriers to large interstate banks have more concentrated banking systems. Canada, for example, has five big banks that control almost 90% of assets in their banking system. I don't think it is a good idea to allow our banking system to become so concentrated. But neither do I lament the passing of small banks that date back to the period before interstate banking was allowed. Nor do I lament winding down of banks that get into trouble due to incompetent risk management practices.
I worked at Chase when it merged with Chemical. It has since merged with JP Morgan to become JP Morgan Chase. With those kinds of mergers our antitrust regulators have to weigh the efficiency of scale versus the anticompetitive aspects. I believe the latter outweigh the former and that those kinds of mergers should not be approved.
