A merger of two banks with different expertise can result in a combination more to the liking of customers looking for one-stop shopping. An in-market merger is one that takes place between two banks operating in the same geographic area, typically a city or metropolitan area. The merged institution often ends up with more than one branch in the same neighborhood and as a result may close overlapping offices. All mergers whether within a market or not result in some redundancies, and therefore present opportunities to save costs by eliminating certain internal systems or merging some products and services. There are nearly four times more deposit-taking institutions in the U.S. than in the 15 nations of the European Union, Switzerland, Canada and Japan combined .
All mergers require regulatory approval and are subject to intense examination by regulators.
If anything, the effect on safety and soundness is generally positive, as mergers allow banks to operate more efficiently, with greater services available to their customers and greater diversification of risks. All mergers require regulatory approval and are subject to intense examination by regulators. However, because such mergers generally are motivated by a bank's desire to gain access to a new market, commitment to the community often is actually enhanced . Banks, aware that merger transactions focus public attention on their role in the community, frequently demonstrate their commitment immediately through greater lending activity. Banking regulators monitor both the statements of commitment made by institutions at the time of a merger or acquisition, as well as banks' performance under the Community Reinvestment Act, which requires banks to serve all parts of the community.