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Economic Commentary

How Should Banking Markets Be Delineated?

The Bank Merger Act and Bank Holding Company Act require regulatory agencies to assess the competitive impact of a proposed merger or acquisition of a bank or a bank holding company. Any merger or acquisition that would tend to lessen competition substantially or create a monopoly in any section of the country must be denied by these agencies. The delineation of a geographic banking market is usually an important factor in the assessment of competition. Yet, it is often a very difficult task to determine the extent of a geographic market area, as indicated by a recent statement of Governor Henry C. Wallich of the Federal Reserve Board: “In this case an array of alternative market delineations has been presented for the Board’s consideration. Each of them, with the exception of Applicant’s ten-county market, has some merit, reflecting recognized economic and competitive relationships, but no one of them is entirely satisfactory.”

The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. The series editor is Tasia Hane. This paper and its data are subject to revision; please visit for updates.

Suggested Citation

Watro, Paul R. 1980. “How Should Banking Markets Be Delineated?” Federal Reserve Bank of Cleveland, Economic Commentary 12/1/1980.

This work by Federal Reserve Bank of Cleveland is licensed under Creative Commons Attribution-NonCommercial 4.0 International