8/1/2023 0 Comments Brady id expertCourts have closely followed this presumption, simplifying the test of presumptive illegality for certain mergers and allowing decisionmakers to cut to the heart of the merger inquiry. In its decision, the Court acknowledged that certain mergers are so clearly likely to lessen competition that they must be prohibited in the absence of clear evidence to the contrary. Philadelphia National Bank has made an indelible mark on merger enforcement generally. In doing so, the Court underscored that a fundamental purpose of the Clayton Act was, among other things, to arrest trends toward concentration in their incipiency. In its decision, the Supreme Court held that certain changes in market structure alone can create a presumption that a merger may substantially lessen competition. On June 17, 1963, the Supreme Court sided with the DOJ, holding that the merger violated section 7 of the Clayton Act. In 1961, the Department of Justice sued to block the merger of the second- and third-largest banks in Philadelphia. In keeping with our celebration of Philadelphia National Bank, I will also discuss the impact of this seminal case on antitrust enforcement more broadly. Today, I will discuss why bank competition is essential, how bank competition has evolved over time, and how the Antitrust Division will fulfill its statutory obligation to protect competition in the banking sector going forward. Broader considerations regarding bank merger regulation is better left to the expert bank regulators. I will limit my comments today to the narrow but important question of how best to apply the antitrust laws to competition in the banking space, with an eye toward preserving the benefits of competition. There are many considerations relevant to bank merger policy. We are examining bank merger policy against the backdrop of an industry that has experienced some recent turmoil. Of course, I would be remiss if I did not address the elephant in the room. Asking whether the factual and economic assumptions underlying the 1995 Guidelines are adequate to measure and assess the many different dimensions of competition that exist today is the responsible course of action. With the popularization of interstate banking, financial conglomeration, online and mobile banking, and the digital transformation of our economy, the banking system of today bears little resemblance to the banking system of three decades ago.Īgainst this backdrop, it is appropriate for us to reassess whether the prevailing approach to bank merger enforcement is fit for purpose given current market realities. The world today – including the banking system – is radically different than it was in 1995. Much has changed since then, as we can all see from our own personal experiences. The Department of Justice and the banking agencies issued the current Bank Merger Guidelines in 1995. The time is indeed ripe for us to re-examine how we assess bank mergers under the statutory framework that Congress has enacted. Recognizing the importance of competition in banking, President Biden has encouraged the Department of Justice and the federal banking agencies to revitalize bank merger oversight to “ensure Americans have choices among financial institutions and to guard against excessive market power.” Simply put: bank competition affects people’s pocketbooks and their daily lives. Bank competition affects the interest you earn on your savings account, the monthly payment on your mortgage or car loan, the fees you pay to withdraw cash from an ATM, the variety of financial products you can choose from, and whether your business can get an affordable loan. As we revise our general Merger Guidelines, Philadelphia National Bank looms large, and its impact on antitrust merger law is enduring and undeniable for enforcement agencies and for courts.Īs we reflect on the legacy of Philadelphia National Bank, I hope we can all agree that bank competition is critically important for all Americans. But the legacy of Philadelphia National Bank is much broader: it is a foundational decision that has paved the way for antitrust merger enforcement across all industries. Philadelphia National Bank is well known in banking circles for recognizing the essential role that the antitrust laws have in protecting competition in the banking sector. Today, I would like to discuss the enduring impact of this landmark case. Sixty years ago this week, the Supreme Court handed down its decision in United States v. And thank you to Brookings for hosting this event. Thank you, Aaron, for that kind introduction. Merger Enforcement Sixty Years After Philadelphia National Bank
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