Are We About To Witness The Greatest Banking Consolidation In U.S. History?
As the number of bank failures in the United States continues to accelerate, many analysts are warning that we could soon see unprecedented changes in the U.S. banking industry. In fact, there are some economists that are warning that we could be about to witness the greatest banking consolidation in U.S. history. As dozens of small and medium size banks have failed, the megabanks have systematically been gobbling up larger and larger slices of market share. In fact, if current trends continue, it doesn't take much imagination to foresee a future where the entire U.S. banking industry has been consolidated down to between 5 and 10 "superbanks". So would that be so bad? Well, yes it would. It would represent a massive shift in financial power away from the American people to big, global corporate banks. But if you happen to be a fan of big, global corporate banks perhaps you will really love what is about to happen to the U.S. banking industry.
On Friday, federal regulators seized Pinehurst Bank, which brought the total number of U.S. banks closed this year to 73. At this point in 2009, only 36 banks had failed.
That means that the number of bank failures has doubled compared to the same time period a year ago.
Is that a good trend?
Well, it is a good trend if you are one of the megabanks that is gobbling up the remnants of these banks that were "small enough to fail".