F14: Why Banks are Different & the Consolidation of the Industry from 1980-2010

Money and banking are vital components of any economy, serving as the lifeblood of financial transactions. In the United States, the banking industry plays a crucial role in the economy, while the Federal Reserve acts as the central bank responsible for managing monetary policy. Banking is a highly regulated industry. How do banks operate in this regulatory environment? In addition, consolidation – the combining of banking institutions via mergers and acquisitions – became widespread in the 1980s and continued into the 1990s and 2000s as regulatory changes permitted banks to operate in multiple states and technology enabled banking institutions to provide services at lower costs. This changed the face of banking in the US. While the benefits of consolidating are clear for an institution, the benefits (and costs) for the consumer are less clear, especially as media headlines often associate consolidation with the closing of bank branches. How does this bode for small community and regional banks? What are the implications of the current environment given the recent bank scares with Silicon Valley Bank (SVB) and First Republic Bank?

Purpose: Learn about banking and consolidation along with its impact on the current environment

Facilitator: Fred Eisenreich