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Federal Reserve Bank of St. Louis
The Regional Economist
Market Concentration and Its Impact on Community Banks
Andrew P. Meyer
Abstract

This article explores the effect that market concentration has on the ability of community banks to expand in their small markets, especially rural ones. For small banking markets, a community bank is often prevented from selling to a crosstown rival because of market concentration regulations, even if it might be in the best interest of consumers for other reasons. For example, compared to an in-market community bank, a large out-of-market bank holding company may have less interest in local institutions and less knowledge about market conditions and the reputation and quality of local businesses.


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Andrew P. Meyer, "Market Concentration and Its Impact on Community Banks" , Federal Reserve Bank of St. Louis, The Regional Economist, volume 26, issue 1, 2018.
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