This is the Cato Daily Podcast for Thursday, January 9th, 2020. I'm

Keila Brown. The number of different banking institutions has shrunk in

recent years is the wave of banking consolidation

itself a problem?

What prevented banking consolidation before the last couple of decades?

Cato's Diego-Zuluaka entertained some of the theories surrounding bank

mergers and where he believes the concern ought to lie.

Since before the financial crisis and now as the financial crisis and now, as the financial crisis and now 10 years ago, banking

consolidation has accelerated.

Why did that occur? Why did that banking consolidation? Why did

that wave begin? Right. There are various different drivers depending on

when you start looking and what school of thought you come from.

But there...

But what I guess what prevented banking consolidation many years ago?

Right.

So the United States has historically had a lot of banks as recently as 1984 with we had 15,000

banks another 3,500 savings institutions and then about 6,000 or 7,000 credit unions. That's a lot per head of population

than most other Western countries. And the reason we had that is that for decades into the

1990s, America had very strong restrictions at the state level on In the only a few states such as California allowed branching. Now from the 1970s those

restrictions began to erode and in the 1990s there was a federal law that

enabled branching all across the country and so since then there's been a major wave of bank

consolidation beginning in the mid-90s and continuing into the present day so

...