Please I need the asnwer in 30 minutes or less, please use your own words and answer correctly
As we have discussed that, the financial industry has experienced a lot of consolidation in the past 30-40 years. Is the consolidation of the banking industry good for financial institutions? What about for depositors and firms? Please justify your answer including at least two benefits or costs that consolidation brings to financial institutions and at least two benefits or costs that consolidation brings to depositors and firms. Please provide detailed arguments.
Consolidation of banking industry is to merge one large bank with a smaller bank or a merger of small banks in to a large bank.
The benefits of consolidation to the financial institutions:
1. It helps in cost reduction and also efficient management of costs as the size increases due to economies of scale.
2. The bank now has larger pool of capital allowing to lend more and take more risks to maintain or better profitability.
The benefits to depositors and firms:
1. The bank will have larger reach and serve customers in a better fashion.
2. Helps in efficiency of the transactions due to larger staff, systems and technologies.
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