Reply #6: There is no reason why there should be more banks than automobile or airplane companies [View All]

Since banks back office operations are mostly information technology and data processing, there are huge economies of scale.

So it is natural that they would consolidate to the extent allowed by anti-trust law.

Typically this is to a few firms. In the case of large airlines, only Boeing and Airbus have the whole market. There are smaller planes by Embraer and Bombardier, etc. but no large ones.

In large jet engines most of the market is controlled by GE, United Technologies, and Rolls Royce.

In other cases such as automobiles, there are a couple dozen manufacturers worldwide, but typically only a few dominant players in any given national market.

Why does anyone imagine that the result of consolidation should be different for banking?