Review of Industrial Organization 19: 503–505, 2001.
THE BANK MERGER WAVE: The Economic Causes and Social Consequences of
Financial Consolidation, Gary A. Dymski. Armonk, NY: M.E. Sharpe, 1999, xxi
+ 320 pages, $24.95 (paper). ISBN 0-7656-0383-7.
Pursuits of mergers and acquisitions in American business in the recent years are
well known to academicians, government agencies, and the public at large. The
banking sector is no exception as Gary A. Dymski in his book, The Bank Mer-
ger Wave, makes clear. In the Foreword section of the book, Dymski cites some
impressive numbers to prove his point as, for example, an average of 1.7 banks
disappeared through mergers each day during the decades of the 1980s and 1990s.
In all, some 7,402 bank mergers totaling $1.8 trillion in assets took place despite
U.S. antitrust laws. As a proof of banking regulators’ leniency in enforcing antitrust
rules, between 1982 and 1992, they approved 205 of 211 bank merger applications
with the effect of increasing market concentration.
The ﬁrst two chapters labelled “Introduction” and “Overview” layout the es-
sential reasons for undertaking this study. These two chapters provide, in the
meantime, a summary of some important results as well as recommendations to
alleviate the harm done by the increase in concentration as related especially to
minorities and lower-income applicants.
In the remaining ten chapters, Dymski provides loads of descriptive inform-
ation, statistical tools for analysis and recommendations based on his ﬁndings.
To begin with, the third chapter with a heading, “Bank Mergers and Regulatory
Policy from the 1960s to the 1990s”, traces the regulatory policy in the thirty-year
period broken down into three phases: 1966 to 1981; 1982 to the present; and a
new emerging phase.
Prior to the 1980s, regulations were intended to stabilize banking with strong
regulatory oversight as a consequence of the insolvency of the banking system in
the 1930s. A change occurred in 1980 when “The Depository Institution Deregu-
lation and Monetary Control Act” was signed into law whereby banks and thrifts
were free to compete with nonblank ﬁnancial ﬁrms. Then, in 1982, the Gran-St
Germain Act focused again on the deregulation of the thrift industry. The two
acts made it necessary for the regulatory agencies to alter merger guidelines in
1982 by permitting mergers at higher levels in the Herﬁndahl–Hirschman Index
(HHI). HHI is the principal measure of market concentration (the higher, the more