The number of independent banks and thrifts has fallen since the 1980s. Nearly 40 years of mergers has resulted in the creation of several giant organizations. This has led to concerns among policymakers that this trend toward increasing concentration has gone too far and, if left unchecked, will result in limited choices for consumers and monopoly power for providers. But when we use different bank products to measure the industry's concentration, we find that there is no universal trend toward increasing concentration.
This article appeared in the First Quarter 2023 issue of Economic Insights. Download and read the full issue.
