Question

Provide one explanation for why the number of U.S. banks has fallen by approximately one-half over the past 40 years.

Answer 1

One reason why the number of Us banks have fallen by one half over the past 40 Years is Consolidation. Some of the banks in the market can make more profit than the other. This gives them an extra resource to operate. Dut to increased profit and extra resources in hand they can buy or take over the smaller banks which will allow them to venture into the newer markets and make even more profits.

Bigger banks due to their large resources are more resilient to socks in the market which makes them bear the consequences of slowdown or recession easily which the smaller banks can't. Another way of consolidation is Amalgamation of smaller banks to form a bigger bank. This allows those smaller banks to access greater resources and larger market share.