In those instances when the merging parties did serve the same local markets, the dynamic nature of competition and antitrust enforcement by the Federal Reserve and the Department of Justice has helped to limit increases in local-market concentration.
The stability of average local-market concentration over time is noteworthy because research suggests that competition for retail customers takes place substantially at the local-market level and concentration is an important determinant of competition. A second factor impacting the declining concentration in local markets was the expanded number of bank branches during that period.