Mergers inevitably impact the payment system and the stability of the banking sector. By diminishing the number of participants in the payment system, they tend to reduce the volume of transactions to be settled. The setting of operational and technological standards aimed at exploiting network economies may well be easier.
On the other hand, larger banks are likely to cause more serious problems in the event of insolvency: the overall effect of mergers on the stability of the payments system will depend on how they affect the riskiness of the individual banks.