Public Interest Assessment and the Federal Reserve Board (FRB), the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC)

Abstract

This chapter discusses merger assessment in the financial sector, where a number of regulatory agencies in addition to the antitrust ones have jurisdiction to assess the transactions in the sector. The purpose of this chapter is to offer an overview of the merger review process in the banking sector. The chapter starts with a discussion of the composition of the banking regulators, the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation, as well as the relevant regulatory framework before discussing some of the seminal case law that shows the approach they take in applying their assessment tests and how these approaches compare with the one antitrust authorities take pursuant to their competition standard. The chapter also discusses some implications that arise from assessing the role and practice of the banking regulators and the competition authority. The chapter argues that even if the antitrust authorities and the banking regulators examine the competitive effects of the mergers, usually they reach different conclusions. The chapter explains that this occurs because these authorities use a divergent approach to define the product and geographic markets. This leads to contradictory outcomes, in which the concerns expressed by the antitrust enforcers are frequently disregarded by the sectoral regulators. The chapter also argues that the regulators infrequently apply a thorough analysis, which leads to the approval of most mergers under the presumption that they protect the public interest even if there is little evidence to that effect.