The changing nature of consolidation in the US banking industry - 1980 to the present

The number of institutions in the US banking industry has decreased from around 14,000 in the 1980s to fewer than 7,000 presently. Any change in the number of banks must be due to the formation of new banks, mergers among existing banks, and the failure of existing banks. Over the years from the mid-1980s to the present the causes underlying the continuing consolidation in the US banking industry have changed from bank failures, to mergers, and back to failures in the recent financial crisis. These trends have also reflected at various points the effects of banking legislation such as the Riegle-Neal Act of 1994. This paper will examine the changing nature of the causes of the ongoing consolidation in the US banking industry from the mid-1980s to the present.