Bank mergers could hurt competition according to Senator Herbert Kohl

February 4, 2009 by · Leave a Comment
Filed under: Industry News 

This is true but at this point, the industry is already dominated by a few national banks.   What I would like to see is assistance giving to banks that can show their books to our regulators and show that will all there liabilities, they are still solvent.  If they are then we should assist them to purchase the assets of the insolvent banks.  

This move alone would restore much confidence in our credit markets because investors would know which rules we are playing by.  Right now, I am not even sure what is going to happen tomorrow so I am very cautious in where I invest my capital.

News:

The use of federal funds for bank mergers rather than lending to get the U.S. economy moving could lead to acquisitions that threaten competitiveness in financial services, a top senator warned on Wednesday.

“It is my view that both the antitrust regulators and those involved in the banking aid process should be cognizant of the impact on competition of mergers and acquisitions in the financial services industry, particularly those financed by TARP funds,” wrote Sen. Herbert Kohl, chair of the Judiciary Committee’s antitrust subcommittee, referring to the Troubled Asset Relief Program, which has funneled billions of dollars to banks.

“Serious concerns have arisen as to whether these transactions are receiving any meaningful scrutiny through the merger review process at the Justice Department,” wrote Kohl, a Wisconsin Democrat.

 

He urged the new heads of the Treasury and Justice Departments, Timothy Geithner and Eric Holder, respectively, not to brush aside antitrust concerns.

 

“We cannot countenance a situation in which the banking bailout leads to a highly concentrated industry with millions of consumers — already suffering as a result of the recession — paying higher banking and credit card fees, higher loan rates, or lower interest rates on savings due to excessive consolidation,” wrote Kohl.

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