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Statement to Congress, October 17, 1995 (issues related to mergers among U.S. banking organizations)

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  • Economics

Abstract

Testimony / by Janet L. Yellen ... before the Subcommittee on Financial Institutions and Consumer Credit of the Committee on Banking and Financial Services, U.S. House of Representatives, October 17, 1995 For release on delivery 1:00 PM (EDT) October 17, 1995 Testimony by Janet L. Yellen Member, Board of Governors of the Federal Reserve System before the Subcommittee on Financial Institutions and Consumer Credit of the Committee on Banking and Financial Services U.S. House of Representatives October 17, 1995 I am pleased to appear before this Subcommittee on behalf of the Federal Reserve Board to discuss issues related to mergers among U.S. banking organizations. The last fifteen years have seen considerable consolidation of our banking system, a process that probably will continue for some time. This ongoing consolidation is in many ways a natural response to the changing banking environment. However, the very large bank mergers that have been consummated or announced in recent years, and particularly in recent months, have raised a number of public policy questions and concerns. In the Board's view, the primary objectives of public policy in this area should be to help manage the evolution of the banking industry in ways that preserve the benefits of competition for the consumers of banking services, and ensure a safe and sound banking system. My statement today will focus on how, within the context of existing law, the Federal Reserve is pursuing these goals, and will review the potential economic effects of bank mergers. Trends in Mergers and Banking Structure It is useful to begin a discussion of the public policy and other implications of bank mergers with a brief description of recent trends in merger activity and overall U.S. banking structure. The statistical tables in the appendix of my statement provide some detail that may be of interest to the Subcommittee. Bank Mergers: From a var

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