Now, consider that the market capitalization of the top 25 banks in the U.S. is roughly five times the market capitalization of the 25 largest securities firms. I think that describes pretty well the relative positions of banks and dealers in that particular food chain. Moreover, foreign banks have an appetite for expansion into the U.S. securities markets, at least that's what John Meehan told me. Well, they had an appetite until recently. There are a number of tangible benefits that can flow from successfully unifying these businesses, including the ability to offer customers one stop shopping and the opportunity to identify and capitalize on synergies through vertical integration of the securities business.
Geographic consolidation appears more simply to reflect combinations to achieve economies of scale.
Yet consolidations, irrespective of the strategic motivations underlying them, may present challenges in combining diverse firm cultures. I am sure a number of you in this room could tell some hair-raising stories of difficulties encountered in merging business units with sharply different cultures. Cultural clashes can wipe out expected gains from a merger or acquisition and even undermine the entire enterprise. It is true that much of the value of a securities firm franchise walks out the door each evening. Yet with all the consolidation going on in the industry, I believe there is still plenty of room for regional and niche firms to exist and thrive.