Moreover, antitrust enforcement has no doubt deterred some highly anti-competitive mergers from even being proposed. Why have banks been consolidating in number and expanding in size and geography? Again, no one answer is appropriate, and each merger is somewhat unique and reflects more than one factor.
In recent years many banks have been responding to the removal BIS Review 34/1998  ˝  -7-  of barriers to interstate banking and branching that restricted entry and divided markets. In such cases, the twin desires to diversify risk geographically and to expand sources of “core” deposits have surely been important motivating forces.