3 ms·

this doesn't really explain it at all. The diversity in the banking system both pre-dated and post-dated those laws, and is present in states that don't have th

• nirimda 4y ago
  I think the first sentence can carry a lot more of the weight of explanation than you grant. There was a suspicion of big banks, which result in one particular law. But it also probably related in other rules and other behaviors.
  • chrisco255 4y ago
    When was the last time they were in effect and at what scale? A century ago? More than enough time for consolidation to happen. In practice, competition flourished due to the lack of restrictions on unique offerings, which allowed banks to compete for different market segments and industries (i.e. car loans vs mortgages). Another major factor is probably the existence of the 50 states themselves, which differ dramatically in real estate laws and consumer lending laws, allowing local banks to specialize and gain a niche but also expand to other states without restrictions.
• imtringued 4y ago
  It probably has to do with the fact that nowadays a bank needs 10 million euros of equity to get started in europe. also, the founders/CEO need to prove three years of academic and three years of practical experience, essentially shrinking down the people that are allowed to start new banks to existing bankers who most likely have no incentive to leave the large bank. This means the regulators are implicitly encouraging the formation of an oligopoly because they have enacted heavy regulation in response to large bank failures. It is kind of ironic.