This article discusses potential lessons on the economic analysis of bank mergers from the economics literature and merger review in industries outside of financial institutions.
Bank mergers in the United States have historically been reviewed by four agencies: the Federal Reserve, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Department of Justice (DOJ). Preservation of competition and the prevention of undue aggregation of market power are concerns shared by all agencies responsible for reviewing a given bank merger. On September 17, 2024, the FDIC, OCC, and DOJ issued revised guidance on how each agency will review bank mergers and, notably, the DOJ withdrew its 1995 Bank Merger Guidelines in favor of evaluating bank mergers under the 2023 DOJ/FTC Merger Guidelines.
In this article published in The Antitrust Source, the authors consider the following question: given advances in economic literature on banking and the DOJ’s and FTC’s approaches to evaluating mergers in similar industries, what could the DOJ’s economic analysis look like for future bank mergers? The article further asks how the 2023 Merger Guidelines might be applied to bank mergers.
This article was originally published in The Antitrust Source in December 2024.
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