Bankers Tell Congress Regulation Hinders M&A and ‘De Novo’ Formation

PYMNTS cited CEI’s expert on bank mergers and de novo banks

“In every business sector, new entrants are essential to the functioning of a competitive, free-market economy,” John Berlau, senior fellow and director of finance policy, Competitive Enterprise Institute, said. But in recent years there’s been a chilling effect on new bank formation: Berlau observed that in some of the years following the financial crisis, no new banks were approved. But by contrast, in the decades before the crisis, the Federal Deposit Insurance Commission approved more than 100 new banks in years going back to the early 1960s. In each of the last two years, only six de novo banks had been approved.

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