At 07:21 PM 9/23/98 -0400, you wrote: >A bit back I remember some incensed comment about the Citicorp-Travelers >Merger. It seems they announced the merger prior to securing approval from >Washington regulators; and the announcement was seen as a move to force >Washtington's hand. > >Well, it seem it didn't take much forcing. 5-0 vote for it, behind closed >doors. Article follows. Comment? Comment: I have a book on bank mergers in the US coming out with ME Sharpe in January. It goes into this question of regulatory stance at great length. Let me just make a few basic points: *the Fed regulatory stance shifted definitively in 1982 with Reagan's installment; rules were loosened in 1982 and 1984, defanging the antitrust laws. These have been weakened since, all on the basis of the now-familiar argument that potential entry is a substitute for actual competition in any given market. I have some econometric results for the California mortgage market which show that market concentration still matters in the old-fashioned way; but this leads to the second point. *there is a kind of quiet generational war going on in the Fed between the older structure-conduct-performance types and the newer efficient-market types. This is to some extent a war between the staffs at the Fed Banks (esp. NY) and the Board. Some Fed economists have actually used event study methods to prove the efficiency of a given action *this reliance on market information will probably be less attractive for a while. In any case, I argue in the book that the merger movement in banking is largely Wall-Street driven; and now that banking prices have tumbled (see the NYT article Tom attached) the game is less enticing. These players were buying banks, a low-margin business at best, at 3 to 5 times book value! Nice capital gains if you can cash them in. Just ask Phil Hazen *The Fed has been so passive in evaluating mergers that there is no longer any danger of a denial; hence the "jumping-the-gun" aspect to merger announcements. The announcement date, in effect, is the merger date. *The anti-trust law is actually still on the books. Strange but true. Gary D. Gary Dymski Department of Economics University of California, Riverside Riverside, CA 92521-0427 Phone: 909-787-5037 x1570 Fax: 909-787-5685 Email: [EMAIL PROTECTED] (office) [EMAIL PROTECTED] (home)