not been a phenomenon involving only large banks. roughly 45 percent of the mergers involved an acquirer and a target each of which had less than one billion dollars in assets. i must emphasize that, despite these merger trends, market and other pressures have kept measures of local market banking concentration virtually unchanged. an important factor has been the almost 1, 400 new commercial bank formations since 1995. it would be a mistake to conclude from these comments that the only way to succeed in banking is through ever - greater size and diversity. indeed, better risk management may be the only truly necessary element of success in banking. the variety in scale, strategy, and approach among quite profitable and well - capitalized banks in this country is striking. a handful of organizations operate diversified, multi - line, financial service businesses nationally or globally or both. others deliver services throughout a multistate region. some specialize in credit cards or mortgage finance. some operate an alliance of smaller, independent organizations through multibank holding companies, seeking local investors and management. some insurance, securities, or investment management firms have become affiliated with banks with the intention of broadening their product lines. some banks have large branch systems whereas others have business plans with no branches, using mail and atms as alternatives. a very few are trying to operate without brick and mortar, only through the internet. and, by number, our structure is still dominated, as it will continue to be, by the community banks that offer local services through local management, using specialized local information. the potential for new entrants, we should not forget, is always there and will keep the existing entities on this non - exhaustive list on their toes. conclusion the factors that have contributed to the strength, resilience, and profitability of the u. s. banking system, which i have described, should continue to guide the industry in the years ahead. we have, in short, every reason to believe that banks of all sizes and types will continue to successfully compete in an ever - changing market environment. nonetheless, as time passes, more and more bank managers will not have the first - hand memories of times of banking stress. that is why we must endeavor to build into bank and regulatory systems the product of the earlier experiences in order not only to retain and consolidate the gains made, but also to rapidly incorporate more widely the future advances that best - practice banks will continue to make.

have shifted to competing institutions. retail internet banking and, for some smaller banks, atms, are examples. but the use of even these defensive investments has often yielded benefits for banks from greater fees and from lower costs resulting from reduced check processing. i would be remiss not to note the more - direct contributions of technology to increased productivity in banking, the same kind of improvements that have occurred throughout our economy. such gains are notoriously hard to measure in banking, but have visibly contributed to the improved profitability of banking. not all such gains have been cost reducing : some have increased cost, but have raised revenue even more by improving the variety and quality of banking services in ways for which customers are willing to pay. the increase in banks ’ fee income is not unrelated to improvements in technology. bank consolidation technology has also facilitated consolidation in banking by making it more efficient at the margin - or perhaps less inefficient - for firms to become larger, more geographically dispersed, and better able to manage multiple business lines. research at the federal reserve and elsewhere is consistent with other indications in the past decade or so of cost scale economies, or fewer diseconomies, and improved control by multibank holding companies over their bank subsidiaries. improvement in the ability of these organizations to make small business loans over a wider geographical area is striking. some of the consolidation of the past decade would not have been possible if the congress, led by the states, had not removed prohibitions on interstate banking and branching. the combination of the resultant geographical diversification with the product line diversification facilitated by technology and the removal of out - dated legal prohibitions, has, in my view, greatly strengthened the stability of our financial system. diversified banking organizations in most recent years have been able to absorb substantial losses in some lines or weak demand for some products without significant hits to capital or, in some cases, even to earnings. banking history as recently as the 1980s and early 1990s would have been quite different had our banking structure then been more similar to that of today. the recent consolidation of the banking system has been dramatic. excluding intra - bank holding company mergers, and including the approximate 100 announced but not yet completed mergers, about 2, 400 banking organizations have been absorbed by other banking entities since 1995. if all the mergers that have been announced are completed, the ten largest banking organizations in the united states will account for about 51 percent of all domestic banking assets, almost double their share in 1995. consolidation has