Date of Award
Master of Business Admin
James Patrick Raines
Commercial banking has been subject to antitrust review for only a few decades. In 1948, the Transamerica Corporation was charged by the Board of Governors of the Federal Reserve System with a violation of Section 7 of the Clayton Act when it acquired controlling interest in several independent banks in California (1). At the time of the acquisitions, the banks in question were in direct competition with one or more oof the banks already controlled by Transamerica Corporation. Moreover, Transamerica Corporation held a major interest in Bank of America. This unique case ignited a fear of probable banking concentration and potential banking monopoly.
The debate about concentrations in banking led to a Congressional inquiry and a subsequent staff report entitled "Bank Mergers and Concentration of Banking Facilities." The report stated the reduction in the number of banks nationwide had lessened competition in many banking communities and recommended remedial legislation to ensure that government banking authorities would study the effect of such merger and acquisitions prior to approving any sort of bank merger of consolidation. (2)
Vance, Kenneth W., "Thrift competition and its impact on financial institution mergers and acquisitions in the Richmond, Virginia RMA" (1988). Master's Theses. 1091.