The U.S. banking industry is currently experiencing the most significant consolidation in its history. The years 1981-1995 have averaged some 434 mergers among healthy banks per year, and have cumulated a stunning 1.6 trillion (1995) dollars in acquired bank assets. Several of these mergers, and especially some in the 1990s, have been the largest 1 in U.S. history --including the mergers of BankAmerica and Security Pacific, Chase Manhattan and Chemical, and Wells Fargo and First Interstate. Passage of interstate banking and branching legislation at the national level, the Riegle-Neal Act of 1994, can be expected to further encourage these trends, since it will allow the development of a truly national banking structure.While the on-going consolidation of the U.S. banking system is in many ways long overdue, it also raises a number of public policy concerns. One of these concerns is the potential impact of consolidation on the competitiveness of banking markets. Under the Bank Holding Company Act, the Bank Merger Act, and other statutes, the U.S.Department of Justice and the federal bank regulatory agencies are charged with enforcing the antitrust laws in banking. Thus, over the years, each of these agencies has developed procedures for analyzing the potential competitive impact of a proposed merger.Current procedures for examining the potential competitive effects of bank mergers, while varying somewhat across agencies, are based on three fundamental

The creation of a number of very large and sometimes increasingly complex financial institutions, resulting in part from the on-going consolidation of the financial system, ha> raised concerns that the degree of systemic risk in the financial system may have increased. We argue that firm interdependencies, as measured by correlations of stock returns, provide an indicator of systemic risk potential. We analyze the dynamics of the stock return correlations of a sample of U.S. large and complex banking organizations (LCBOs) over 1988.1999, and find a significant positive trend in stock return correlations. This finding is consistent with the view that the systemic risk potential in the financial sector appears to have increased over the last decade. In addition, we relate firms' return correlations to their consolidation activity by estimating measures of the consolidation elasticity of correlation. Consolidation at the sample LCBOs appears to have contributed to LCBOs interdependencies. However, consolidation elasticities of correlation exhibit substantial time variation, and likely declined in the latter part of the decade. Thus, factors other than consolidation have also been responsible for the upward trend in return correlations.

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Who Uses Electronic Banking? Results From the 1995 Survey of Consumer Finances However, as the footnotes to the table indicate, commercial and government transactions are included in 3 the data. Large dollar instruments, such as Fedwire transfers, are excluded. This is probably because ACH debits and credits are relatively large (small) dollar transactions, such as 4 payroll, pension, and mortgage payments. Average annual growth rates for the number (dollar amount) of debit card, credit card, ACH credits, and 5 ACH debits are 69 percent (58 percent), 8 percent (14 percent), 16 percent (33 percent), and 19 percent (14 percent).