Mergers Will Lead to a Better Banking Industry
Deals between struggling midsized banks can make the financial system safer, leaner and more competitive. Regulators should ease the way.
Hard to compete with.
Photographer: Gabby Jones/Bloomberg
For banks in 2023, one message is coming through clearly: Scale is good.
The US has a lot of banks. At one end are small community banks, which provide essential services to small towns, rural areas and minority groups that are often overlooked by bigger rivals. At the other end are the megabanks, such as JPMorgan Chase & Co., which cater to global corporations and investment firms as well as to individuals and businesses. Then there’s the middle tier, which has traditionally focused on lending to property developers and businesses in specific regions, often competing with community banks in some areas and with megabanks in others.