Lemonade or lemon?: Riegel-Neal and the consolidation of American banking

Riegle-Neal altered the American banking landscape by eliminating the prohibitions against banking and branching, thus paving the way for banking mergers and interstate acquisitions across state lines. The law's proponents expected that it would lead to fewer but stronger banks more able to compete with domestic, nonbanking financial institutions and with foreign banks both at home and overseas. Detractors feared that fewer but larger banks would reduce services to individuals, small businesses, farmers, and small communities or increase the cost of these services. This paper finds that fears associated with Riegle-Neal have become mute because branching networks and de novo banks filled niches created or left vacant by large banks' expansionism.