The consolidation of the financial services industry: causes, consequences, and the implications for the future
AbstractThis article designs a framework for evaluating the causes, consequences, and future implications of financial services industry consolidation, reviews the extant research literature within the context of this framework (over 250 references), and suggests fruitful avenues for future research. The evidence is consistent with increases in market power from some types of consolidation; improvements in profit efficiency and diversification of risks, but little or no cost efficiency improvements on average; relatively little effect on the availability of services to small customers; potential improvements in payments system efficiency; and potential costs on the financial system from increasing systemic risk or expanding the financial safety net.
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Bibliographic InfoPaper provided by Federal Reserve Bank of New York in its series Staff Reports with number 55.
Date of creation: 1998
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-1999-01-25 (All new papers)
- NEP-CFN-1999-01-25 (Corporate Finance)
- NEP-FMK-1999-01-25 (Financial Markets)
- NEP-IAS-1999-02-01 (Insurance Economics)
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- Hans Gersbach & Harald Uhlig, 2007.
"On the Coexistence of Banks and Markets,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 109(2), pages 225-243, 06.
- Calcagnini,G. & Bonis,R. de & Hester,D.D., 1999. "Determinants of bank branche expension in Italy," Working papers 32, Wisconsin Madison - Social Systems.
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