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Bankers merge their way out of employees & markets
FOR RECENT EXAMPLES, SCAN DOWN to section after table, below.

The conservative London magazine, The Economist, pans bank mergers in their 8/28/99 issue in an article called "The bank-merger splurge - Bigger banks, formed purely from domestic mergers, may not be better banks" (p.15). Some excerpts:

...Last year, this mania for megabanks was most obvious in America. This year it has gripped France, Germany, and even Japan.... But size brings at least three dangers of its own.
  1. So long as barriers, formal or not, keep out foreign banks (as, e.g., in France), mergers may reduce competition and hurt consumers.
  2. ...The Bank for International Settlements (BIS) worries that...[even reduced] "competitive pressures interact with stubborn cost structures and heighten incentives for risk-taking." That is especially dangerous since bigger banks are more likely to be considered "too big to fail", and hence to carry a greater implicit government guarantee.
  3. ...As the BIS also found, and several American megabanks are learning, the alleged benefits of merging for banks' profitability often [get reversed].
In his 1932 book, Jobs, Machines, and Capitalism (Macmillan: New York, p. 173), Arthur Dahlberg focuses on the wave of mergers and acquisitions in the 2nd half of the 1920s as it manifested especially in the American banking industry.  Says Dahlberg,
"In many states, many of the major banks were at that time brought under the financial control of one set of directors.  A report of the time stated: 'In the field of banking, the annual report of the Federal Reserve Board reports steady increase in mergers and consolidations.  The number of mergers affecting capital resources of member banks...are...shown in the following statement' from p.182, Recent Economic Changes (McGraw-Hill: New York, 1929) -"

M&As and Suspensions in Banking 1919-30
Years191919201921192219231924192519261927192819291930
Mergers8077104125120124120154259gapgapgap
Suspensions631685053676467756189766694996591352

Click here for complete data series on suspensions in banking.

As today, many of the M&As in the 1920s had consequences in terms of downsizing the workforce.

Bottom line - The Great Depression did not start overnight on Oct. 29, 1929 when the stock markets crashed and top executives and the media began to see through the happytalk.  It was building all through the "Roaring Twenties," all through the cheerleading about achieving a "permanent plateau of prosperity," all through the years the media was amplifying whispers of good news and downplaying shouts of bad news (sound familiar?).
The Great Depression was building throughout the 1920s in the form of downsizing the workforce.

Seventy years later, M&As in the American banking industry alone have been estimated to cost 95,000 jobs a year between 1995 and 2000.   Here are - and we've fallen way behind on collecting them here -


a few recent examples (by no means all) -
(Find more for yourself by searching on 'bank' or 'banc' thru the archives at the bottom of our merger page.)

2/23/2004   1 big bank takeover reported in WSJ &/or NYT - S

2/18/2004   2 bank takeovers reported in WSJ &/or NYT -
  1. National City of Cleveland will buy Provident Financial of Cincinnati for $2.1B, WSJ, front page (//NYT C3).
  2. Sun Bancorp to acquire Community Bancorp of NJ for $83.2m, NYT, C3.
2/17/2004   1 really big bank takeover reported in WSJ &/or NYT - 1/20/2004   2-in-1 bank-takeover items reported in WSJ &/or NYT - 1/15/2004   2 bank takeover stories reported in WSJ &/or NYT -
  1. J.P. Morgan Chase to buy Bank One - Plan valued at $58B has Dimon succeeding Harrison as CEO in '06 - Big competitor to Citigroup, WSJ, front page (//NYT, front page).

  2. Big mergers have a long history of failure and troubles, by Alex Berenson, NYT, C8.
    If history is any guide, at least one sure-fire "bet the house and then double-down" winner will emerge from J.P. Morgan Chase's giant acquisition of Bank One.
    That would be Citigroup.
    Megamergers like the one announced yesterday have a long and glorious history of failure and troubles. Ask the shareholders of Time Warner and America Online.
    1. Or Chrysler and Daimler-Benz.
    2. Or Hewlett-Packard and Compaq.
    3. Or J.P. Morgan and Chase Manhattan.
    4. Or Bank One and First Chicago NBD.
    5. Or Wal-Mart and ... wait.
    Wal-Mart does not do big mergers, though it will buy much smaller competitors in so-called tuck-in acquisitions.
    Southwest Airlines, Microsoft and many of the other truly successful growth companies and stocks of the last generation do not depend on big mergers either.
    Citigroup is something of an exception, but even it has stopped making really big deals since 1998, when it was created by the merger of Citigroup and Travelers Group.
    In general, great companies prefer to grow "organically," as Wall Street likes to say. That is, from the inside out, by finding new markets or by taking market share from their competitors [without taking over their competitors].
    Which makes growth by mergers inorganic, nonliving growth. Companies buy customers when they cannot win new business on their own. They merge when their executives do not have a better idea of what to do.
    Those are often the facts missing from the splashy announcements of big deals. They are especially true of mergers between lagging companies.
    And J.P. Morgan and Bank One are nothing if not lagging. Over the last 5 years, their stocks have each fallen about 15%, ranking 5th and 6th among the seven largest banks in the U.S. That dismal performance is directly related to the fact that J.P. Morgan Chase and Bank One are each the product of a megamerger.
    (Wachovia, the only other big bank whose stock has performed worse over that span, is also the product of a series of mergers.)....
1/14/2004   1 bank takeover story reported in WSJ &/or NYT - 1/13/2004   1 bank takeover reported in WSJ &/or NYT - 1/03/2004   1 bank takeover reported in WSJ &/or NYT - 12/22/2003   1 big bank takeover reported in WSJ &/or NYT - 10/29/2003   1 big bank takeover reported in WSJ &/or NYT - 10/28/2003   2 bank takeovers reported in WSJ &/or NYT -
  1. Bank of America bets on consumer - Acquisition of Fleet Boston for $43B signals growing industry battle - A race to find new accounts, WSJ, front page.
    [but there aren't any new accounts because these corporate clowns have laid off so many of their own and their customers' customers. The pointer summary says the deal -]
    would create the nation's No. 2 bank....

  2. First Bancorp, NYT, C6.
    ...Troy NC, parent of First Bank...completed the purchase of 4 branches in NC from RBC Centura, a unit of Royal Bank of Canada; the deal was announced on Aug. 14.

10/25/2003   1 big bank takeover reported in WSJ &/or NYT - 9/12/2003   2 bank takeovers reported in WSJ or NYT -
  1. First Midwest Bancorp, Chicago, agrees to buy CoVest Bancshares, Des Plaines, for $102.5m, NYT, C3.

  2. HSBC Group, Britain, gets approval to acquire Polski Kredyt Bank, Warsaw, for $7.8m, NYT, W1.

8/29/2003   FleetBoston Financial Corp. to buy Progress Financial Corp. for $211m, Bloomberg via NYT, C3.

8/26/2003   Fulton Financial Corp. to buy Resource Bancshares Corp. of Va. & Fla. for $195.6m, Bloomberg via NYT, C4.

8/20/2003   British bank 'expansion' [our quotes] - HBOS took over the Bank of Western Australia for $1.6B, by John Shaw, NYT, W1.

8/06/2003   Royal Bank of Scotland Group PLC - Stock declines after earnings fall short of analysts' forecast, Dow Jones via WSJ, D4.
...The Edinburgh bank made six acquisitions in the first half, including the Churchill general-insurance business in the UK and Commonwealth Bancorp Inc. in the US.

8/05/2003  HSBC Holding's first-half net, pointer blurb (to A3), WSJ, front page.
...rose 25%, easing doubts over the big bank's $16B purchase of Household International Inc. earlier this year.

7/25/2003  J.P. Morgan buying Bank One trust business for $720m, Reuters via NYT, C4.

7/23/2003  First National Bank Holding to buy Access Anytime [for $22m], Reuters via NYT, C4.
Access Anytime Bancorp [is] a holding company for FirstBank in New Mexico....
First National Bank Holding Co. [is] the parent of First National Bank of Arizona and First National Bank of Nevada....

7/03/2003  Provident Bancorp to buy New York bank [E.N.B. Holding] for $73.5m, Bloomberg via NYT, C4.

6/28/2003  $1.6B deal creates NYC area's 2nd-biggest S&L - New York Community Bancorp to purchase Roslyn Bancorp, by Joseph Treaster, NYT, B2.

[some rare good news -]
6/24/2003  Canada issues moratorium on bank mergers, Dow Jones via WSJ, A14.
[Full article fully commented on our M&As page, 6/24/2003 #1. Mergers, like layoffs, will eventually be banned as slow economic suicide except immediately pre-liquidation. Future centuries will look back on this period as economic barbarism.]

5/27/2003   Hokuriku Bank Ltd. - [¥??] merger with Hakkaido Bank to create [2d-] big[gest] regional player, Dow Jones via WSJ, C9.
[Compare -]
Four Japanese banks lost nearly $31B last year, pointer digest (to C4), NYT, C1.
[And more mergers&downsizings are going to impoverish more customers and worsen bank losses. So, Japan needs to switch, as do we all, from downsizing to timesizing, to maintain employment and consumption and centrifuge income as necessary to support markets.]

5/21/2003   2 Seattle-based banks merge - Washington Federal to buy United Savings & Loan for $65m, Reuters via NYT, C4.

5/20/2003  Wells Fargo to buy Pacific Northwest Bancorp [for $623m], Bloomberg via NYT, C6.

5/09/2003  Barclays to buy Spanish bank [Banco Zaragozano] for $1.14B, by Portanger & Vitzhum, WSJ, C11.

4/09/2003  UnionBanCal to buy Monterey Bay Bancorp for $96.5m, Bloomberg via NYT, C4.

4/08/2003  United Bankshares [Parkersburg WV] to buy Sequoia Bancshares for $109m, Reuters via NYT, C4.

4/07/2003  Bank of Montreal to buy [investment bank] Gerard Klauer Mattison [of NYC, for $30m], Reuters via NYT, C4.

3/14/2003  Mercantile Bankshares Corp. Acquisition of F&M Bancorp [of Frederick MD] will cost about $500m, Dow Jones via WSJ, C7.

3/13/2003  Credit Agricole, Dow Jones via WSJ, C14.
Credit Agricole SA said it is confident France's banking regulator won't force significant changes on its planned merer with Credit Lyonnais SA, amid signs the 2 banks will have to sell only a limited number of branches to win approval for the 19.5B euros ($21.5B) deal....
[We mentioned the possibility of this merger on 12/17/2002 below.]

[some good news for a change -]
2/08/2003   Canada: Hearing on bank mergers, by Bernard Simon, NYT, W1.
...The Canadian government has thwarted several merger attempts among the banks in recent years amid concerns that further consolidation would give them too much power and lead to huge job losses...\..
[Excellent policy based on true concerns. Note from the squib immediately below this one Sthat Canada's concentration of business and national workload has already exceeded healthy proportions -]
Canada: Job market turns flat, by Bernard Simon, NYT, W1.
After a year of buoyant growth [Canada's economy has not been allowed to deteriorate as far as the U.S.'s], Canada's job market turned flat in January, with 34,400 new full-time jobs offset by the loss of 36,500 part-time positions, Statistics Canada said. The unemployment rate fell to 7.4% from 7.5% in December. Canada's economy has been more robust than that of the U.S. recently. But with the U.S. accounting for 85% of Canada's exports, recent data has pointed to a slowdown in Canada.
[Note that Canada's definition of unemployment is more inclusive and less narrow (i.e., less prettied-up for incumbent politicians) than the U.S. definition and that Canada's disability, incarceration, premature retirement, and forced part-time rates are much much lower, despite similarly lax immigration-law enforcement. Back to the banking article -]
The chief executives of 3 of Canada's biggest banks told a parliamentary committee in Ottawa that merger and takeover curbs should be eased to enable their institutions to expand more aggressively in the United States.... Peter Godsoe, chairman of the Bank of Nova Scotia, told the committee that banks merge to increase scale, to diversify and grow outside Canada.
[No they don't, Peter. They merge just to feed your power hunger and keep you from getting bored. We suggest more sex. Or a complete change of job. Try rangering in the Grand Canyon for a summer, like Colleague aka Ranger Kate. Boredom and overreach are huge problems on the part of chief executives. Look at George W. "Dubya" Bush and his administration, and Tony Blair. The "I'm crazier than you" approach worked for Reagan with the USSR - by sheer luck - and he didn't even try it with Qaddafi. The game of gambling with millions of other people's lives and jobs is something these clowns want to play, and we must somehow design OUT this possibility before one of them loses and kills off a serious portion of the planet. We must get rid of the Electoral College to cut off that avenue of manipulation, and get a new more-relevant economics of marginalism - focusing on determining the points of diminishing returns in terms of the general surplusing of labor and the hyper-concentration of income and wealth, and on the huge costs of allowing our economies to drift anywhere near these thresholds.]

1/23/2003   SunTrust buys bank in South Carolina resort area [Lighthouse Financial Services, for $130m], Reuters via NYT, C3.

1/22/2003   BB&T to acquire First Virginia Banks for $3.38B - Stock purchase will raise share [of] Virginia market to 14%..., by Carrick Mollenkamp, WSJ, B5.
[followup]
U.S. [Justice Dept.] approves BB&T purchase of First Virginia Banks [for $2.97B], Bloomberg via NYT, C4.

12/20/2002   [here's a particularly bad one]
UnionBancal, NYT, C4.
...San Francisco, Calif.'s 3rd-largest bank [has] agreed to buy closely held John Burnham & Co., San Diego, a commercial insurance broker....
[This one directly violates the hard-learned Glass-Steagall Act of the 1930s which separated banking, brokerage and insurance, an Act that was recently, and stupidly, repealed, thus reopening the door to all kinds of conflict of interest at a time when corporate corruption in America is already rife and dampening the stock markets and the economy. Dumb dumb dumb.]

12/18/2002   Korean banks try for edge in furious consolidation fight, by Don Kirk, NYT, W1.
SEOUL....- The word that best describes South Korea's banking sector today might be "frenzied." [Banks] are jockeying to buy one another and survive a wrenching consolidation.... The pace quickened this month as bids were submitted for Chohung Bank, Korea's oldest bank and its 4th largest....

12/17/2002   A sign of consolidation among Italian banks, Dow News via WSJ, A14.
MILAN - The planned merger of Italian cooperative banks Banca Popolare di Bergamo Scrl and Popolare Commercio & Industria Scrl is the latest signal that Italy's fragmented midsize-bank sector is gearing up for a long-awaited consolidation. ...Bergamo said Saturday it will pay 1.3B euros ($1.33B) in stock for Commercio & Industria and its majority-controlled unit, Banca Popolare di Luino e di Varese Scrl....
[And a story today on a probable bank merger in France, which we may or may not hear about when it's actual.]
Credit Agricole merger jolts European banks - Plan to buy Credit Lyonnais puts pressure on small rival to grow, especially BNP, Societe Generale, by Jo Whitton, WSJ, B1.
[Imagine the clueless pollyanna-ism of the WSJ to craft a headline like this - as if there's room for smaller rivals to "grow" in a regional and global depression.]
Credit Agricole SA's $19.94B bid to acquire French rival Credit Lyonnais SA already is sending ripples throughout the European banking business.... "Other European banks have to think about mergers now," says Anjay Oberoi, a fund manager at Union Investment in Frankfurt....
[And since mergers are appetizers for consolidation and downsizing, there will then be even less business for banks.]

12/12/2002   Bank calls purchase way to woo Hispanics, by Tim Weiner, NYT, W1.
MEXICO CITY...- Bank of America [will] pay $1.6B in cash for 24.9% of Grupo Financiero Santander Serfin, the most profitable bank in Mexico....

12/03/2002   Peoples Bancorp announces deal, Dow Jones via WSJ, A18.
MARIETTA, Ohio - Peoples Bancorp Inc. agreed to acquire Kentucky Bancshares Inc. for about $31.4m in cash and stock....

11/05/2002   M.B. Financial to purchase South Holland Bancorp, Bloomberg via NYT, C4.
...for about $93.1m.... MB Financial is based in Chicago and South Holland...in South Holland, Ill.

[some possible good news -]
10/31/2002   Canada's Manley denies merger ban, WSJ, A17.
Canadian Finance Minister John Manley said there is no ban on bank mergers, noting last year's Bank Act revisions left the door open to such unions but that so far no bank had sought his blessing. But Canadian bank shares fell for the second session in a row, following a report Tuesday in the [Toronto] Globe & Mail newspaper that said PM Jean Chretien's office had intervened to halt a proposed merger of Bank of Montreal and Bank of Nova Scotia. "There's no such ban," Mr. Manley said after a parliamentary committee hearing in Halifax, NS....

10/29/2002   Federal Reserve gives approval to Citigroup to buy Golden State Bancorp, WSJ, C9.
...in May valued at $5.8 billion....

10/04/2002   BB&T is buying FloridaFirst Bancorp for $134m, AP via NYT, C4.
...The announcement comes nearly 3 weeks after BB&T...based in Winston-Salem NC..\..completed its acquisition of Regional Financial of Tallahassee, parent company of a real estate lender, First South Bank....

8/29/2002   Washington Mutual acquires Homeside Lending for nearly $1.3B[+$735m debt= $2 billion] - Thrift buys operations from National Australia Bank, which exits U.S. market, by Calmetta Coleman, WSJ, A2.

12/11/2001  United Bancshares, United Bank's holding company, buys Century Bancshares for $70.3m, Bloomberg via NYT, C4.

12/05/2001  Marshall & Ilsley, Wisc.'s largest bank, to purchase Century Bancshares for $68m, Bloomberg via NYT, C4.

11/22/2001  United National Bancorp to buy Vista Bancorp for $151.8m, NYT, C5.

11/20/2001  Netbank buys mortgage lender Resource Bancshares Mortgage Group for $148.3m, by Andrew Zipern, NYT, C7.

11/15/2001  Atlantic Bank of New York buys Yonkers Financial for $69.6m, Bloomberg via NYT, C4.

11/14/2001  Washington Trust Bancorp based in Westerly RI buying First Financial Cp. for $39m, Bloomberg via NYT, C4.

11/10/2001  Royal Bank of Scotland got Fed approval to buy 345 bank branches from Mellon Financial for $2.1B, NYT, C4.

11/09/2001  BB&T is buying two Kentucky banks for $823m, Reuters via NYT, C4.

10/16/2001  First Merchants agrees to acquire Lafayette Bancorp for $115.8m from shareholders, Bloomberg via NYT, C4.

10/03/2001  National Bancshares Corp., owner of First National Bank, to buy Peoples Financial, both of Ohio, for $15.2m, NYT, C4.
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12/29/2000  Fulton [Financial] agrees to buy Drovers Bancshares [including 17 Drovers & Mechanics Bank branches, for $144.4m], Bloomberg via NYT, C4.

12/12/2000  Sale would permit merger of 2 California banks [- People's Bank of California (PBOC) Holdings to be sold to FBOP Corp. (First Bank of Peoria??) of Oak Park, Ill. for $200m and merged with FBOP's California National Bank unit in L.A.], Bloomberg via NYT, C4.

12/06/2000  BB&T, a bank group, will buy Century South [Banks for $428.2m in] stock, Bloomberg via NYT, C4.
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6/22/99 Royal Bank of Scotland unit will purchase [United States Trust (UST) for $1.4b], Reuters via New York Times, p. C4 (NE).
The Citizens Financial unit...strengthened its position yesterday as the No. 2 banking company in the Northeastern United States.... The transaction comes six weeks after Royal Bank and Citizens announced the $350 million purchase of part of the Boston-based State Street Corp.'s commercial operations.
The deal will result in the elimination of 800 jobs from the two banks and 30 branch closings. UST jumped...$6 a share [24%]...
[There's the link between mergers and job loss and stock jumps.]

6/07 Zions Bancorp to buy First Security for $5.9 billion - To create nation's 20th-largest bank, by Daniel Dunaief, Bloomberg via Bos Globe, B5.
SALT LAKE CITY - ...The number two bank in Utah yesterday [on Sunday? Are Mormons that mercenary?] agreed to buy its bigger rival....
Banks have been buying each other at a rapid pace to cut costs and boost profits as they face increased competition from banking and non-banking financial services companies....
["Cut costs"??]
Zions and First Security said they would cut about $108 million in expenses from the combined bank, with half of that coming 2000 and the rest in 2001..\..
[How many job cuts does that involve? No indication in this article.]
Zions is the latest bank to buy its cross-town rival [as did Fleet of BankBoston on 3/15 for $15b].... Zions...has made several acquisitions in the last few years, particularly in California, where the company purchased Sumitomo Bank of California for $546 million.... First Security last week completed its purchase of Comstock Bancorp for about $65.8 billion [this has gotta be a misprint for "$65.8 million"] in stock, expanding into northern Nevada....
[THIS is what they call "free-market competition"?!? We're sorry, but this is completely out of control. Is there no regulation of this depression-inducing madness?]
Since regulators limit the percentage of total deposits that banks can hold in any state, Zions said it would sell some deposits in Utah to clear the way for its acquisition of First Security....
[Oh real effective! And Congress wants to repeal the rest of the banking regulation that we learned the hard way in the '30s, so banks, brokerages and insurance firms can all invade one another's businesses. "Secure" banks and insurance firms can all leap into the insecure brokerage business on the assumption that the stock market is a sure thing. Isn't this what the big hedge fund did last September? Isn't this what the banks and private investors did in the 1920s? There's nothing that induces insecurity faster than the assumption of security in the stock market. More generally, there's nothing that induces insecurity faster than taking security for granted.]

6/03 Peoples Heritage [Financial] in buyout - Maine bank to get Banknorth in $712m stock-for-stock deal, by Lynnley Browning, Bos Globe, D1.
...New England's fifth-largest bank...of Portland...said yesterday it would acquire [a Burlington-Vt.-based community bank].... The deal...boosts Peoples Heritage's size by 1/3 [and] creates a full commercial bank with $17 billion in assets, just $4 billion less than Citizens Financial [which] will soon be New England's 2nd-largest bank....
[Presumably Fleet/BankBoston is the largest - see our 3/15 story below. The Peoples Heritage deal is apparently not completed until May, 2000 - see aside in 2/20/00 "Banknorth to buy insurer," Bloomberg via NYT, C11.]
Peoples Heritage will still be only the 4th-largest bank in Massachusetts, behind Fleet/BankBoston, Citizens, and UST Corp.... It will change its holding company name to Banknorth Corp. - a name reflecting a broader geography "that might make us more attractive to a potential acquirer someday," [Peoples CEO William] Ryan said.... Peoples Heritage declined to detail how it would boost revenues or cut...Banknorth's costs.... Some analysts think Peoples...overpaid for Banknorth.... "We were surprised Peoples Heritage didn't negotiate the price down a little bit," said Bruce Harting, a banking analyst at Lehman Brothers. "Ultimately, investors who stay with the company are betting that it will be taken over."
[Is anyone else getting the feeling that CEOs (and investors) are not so much getting lazy as getting bored? They don't want to be bothered managing (or researching) any more. "Just buy us out and YOU take over the hassles." But then what do they do with their time? Watch sports on TV? Hold a war and watch it on TV? Our only prescription - "evolution is a vast long-term trend from greater violence and drama, to greater gentleness and variety."]

6/02 AmSouth Bancorp to buy First American in $5.3b deal - Alabama bank doubles assets [in] Tenn. and Miss., Bloomberg via Bos Globe, D3.
BIRMINGHAM, Ala. - ...Alabama's third-largest bank yesterday agreed to buy...the Nashville-based bank.... First American said in March that...it lost some customers following its purchase of Deposit Guaranty Corp. last year.... AmSouth executives said First American was addressing the customer losses. "The underlying cause of the customer attrition has materially improved," Sloan Gibson, AmSouth's CFO said....
[Does that mean they've set Deposit Guaranty Corp. free again? Not likely.]

5/21 Bankers Trust [$10.2b giveaway to Deutsche Bank] OK'd, AP via Bos Globe, C2.
[Let's call a spade a spade and stop trying to hide the ominous loss of control that this "deal" represents.]
...The acquisition of Bankers Trust [by Deutsche Bank AG] would be the biggest takeover [in history] of a US financial institution by a foreign bank..\.. The vote was 6-0 by the central bank's [i.e., the Federal Reserve's] board of governors, who determined the [takeover] of the nation's eighth-largest bank [by] Germany's largest would not threaten banking competition in this country.
[Oh yeah? Actually they have no way of 'determining' it in the sense of 'controlling' it so it happens that way, and in the sense of 'guessing' that it will probably happen that way, what was their evidence?]
..\..New York-based Bankers Trust concentrates on banking for big corporations and does no business with consumers.
[That's supposed to reassure us? It doesn't. It actually makes it worse, and here's why - ]
..\..[The "merger"] would create the world's largest financial institution....
[It's a question of control, and we have just given away control of the world's largest financial institution to our principal foe in the last two world wars, not to mention the 8th-largest slice of America's banking business, and the 7th-or-higher slice of America's big corporate banking, thanks to a private institution, the Federal Reserve Bank, that has no accountability, thanks in turn to a cowardly, ignorant and irresponsible "representative" Congress. What an argument for speeding up our progress toward direct democracy via more referendums and citizen initiatives, and more experiments toward Buckminster Fuller's vision of 24-hour telephone referendums! Maybe we need a webpage with more focus on direct democracy than our current referendums page.]

3/15/99 Fleet to acquire BankBoston, $16b stock deal will create nation's 8th-largest bank, by Lynnley Browning, Bos Globe, front page.
[And can we assume that this will create New England's largest bank? Ah, it all seems so familiar. Jump to the top of this page to check out the bank mergers&acquisitions in the 1920s.]
...a powerful new financial institution [called Fleet Boston Corp. with $178b in assets] out of two bitter rivals [stunning] the banking world by bringing together two strikingly different companies [to establish] a new, stronger player in national and international banking.
[We disagree that the new financial institution will be more powerful. We disagree that it will be a stronger player. Why? "Two strikingly different companies" that, for starters, are going to close a couple dozen branches and terminate 5,000 of their own customers, that's why. More size and less service, that's why. Increasing concentration of wealth among fewer people who need fewer banks, that's why. Presumably that's one unexpressed reason for BankBoston's "stumble" - ]
...The deal underscores the dominant position of [Fleet Financial Group Inc.] over BankBoston, a patrician, 215-year-old institution that has recently stumbled.
...Fleet bought Shawmut [Bank] in 1995.... Then Bank of Boston...responded by buying BayBanks Inc. in 1997. US banks have gone through a wave of mergers in recent years....
[And check out poor Henrique Meirelles, now BankBoston's president, in the photo on page A14. Check out his body language - eyes dilated in shock, smile branded on, hugging himself for comfort.]

12/17/98 $454m merger creates Vermont's largest bank, AP via Boston Globe, p. B27.
...The merger between Chittenden and Vermont Financial Services would create a $4.2 billion institution.... It has 64 branches in Vermont, Southern New Hampshire and Western Massachusetts.... The merger comes nearly a year-and-a-half after Vermont Financial took over Eastern Bancorp.... [That] integration...proved to be a challenge...and many customers' accounts were scrambled or lost for a time while problems were worked out.
[Hence the saying, the more technology, the less service and the more fees. Compare 411 (directory assistance), air travel, mortgages, taxes, college admissions, adoptions, healthcare....]

11/24 Record day of mergers tops $42b, by Dylan Ratigan, Bos Globe, C13.
...including a record 10 that each exceeded $1 billion... Some $2.1 trillion in mergers has been announced worldwide this year, obliterating last year's record $1.6 trillion with more than a month left in the year..\.. More than 22 companies agreed, or said they were in talks, to merge.... Deutsche Bank AG...offered $8.9 billion cash for Bankers Trust Corp....

9/24 Fed approves [$50.7b] Citicorp, Travelers merger, Bloomberg, via Bos Globe, p. C2.
...removing the last regulatory barrier to the combination of the second-largest US bank with one of Wall Street's top securities and insurance firms.... The Fed required the combined company...to make sure its businesses don't run afoul of the Bank Holding Company Act of 1956. That law forbids banks from affiliating with nonbanking business such as insurance underwriting. The new company will have up to five years to meet the law's requirements, and it's betting that by then, Congress will have replaced the law with a less stringent one.
[Ralph Nader (NPR 12/30/98) sees this as a case of corporate civil disobedience. He sees large risks to personal privacy in America if the two types of data, banking (credit) and insurance, are merged. And of course, these are two things we learned the hard way (Depression) to keep separate, like banks and brokerages.
[Nader talks about a huge effort by the right wing to attack antitrust in the early 1980s. It seems that every so often a wave of boredom and impatience sweeps over top executives and they don't want to produce for excitement any more, they just want to make deals and impress themselves with bigger size or, in selling off subsidiaries, purer purpose. It's got no particular long-term vision. It may be a big contributor to the long wave in the business cycle.]

And prior to Sept/98, according to National Public Radio (on 12/30/98), there were other big bank mergers such as -

  • NationsBank with BankAmerica
  • Wells Fargo with Northwest...

    Contrary to merging banks, Timesizing makes the economy more efficient by reducing work (i.e., work time; i.e., the work week) rather than consolidating, reducing the work force and with it, the consumer base in pursuit of a market-shrinking "efficiency." Timesizing maintains the workforce and the consumer base by flexibly sharing the vanishing human work on the fly as that work gets taken over by machines (as in agriculture), robots (as in manufacturing) and computers (as in services). Wages do not fall as worktime is cut, because wages are a function of supply and demand of labor, and the technology-coordinated reduction of worktime maintains the same labor supply and demand configuration as before the introduction of the technology. In other words, coordinated workweek reduction prevents labor from becoming a surplus commodity and experiencing falling wages.


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