Nonetheless the emergence of some American champions on the international stage plainly changes the banking landscape quite dramatically

Nonetheless, the emergence of some American champions on the international stage plainly changes the banking landscape quite dramatically. Once deregulation is complete in two years, the numbers will begin to shrink. Analysts reckon that with each merger it may be possible to lop some 30 per cent off costs. Once the law allows it, the forces are therefore such that it will be hard not to merge; it is possible that we will see the emergence of a handful of powerful American behemoths.Size is no guarantee of greatness or success, as the Japanese banks have proved.

It carries with it all the usual starry-eyed rhetoric about the creation of a truly global financial services company, of course, but fundamentally this is a slash and burn merger designed to place Chase and Chemical at the forefront of efficiency in a world of ever-shrinking lending margins. Chase has also been under growing pressure from investors to do something about its lamentable record on shareholder value. However, though there may be company- specific reasons for this get-together, it is also almost certainly a harbinger of things to come There are about 11,000 state and regional banks in the US. Both Chase and Chemical are New York banks and they could have merged before. This is a marriage primarily driven by the need for cost-cutting. Americans have a tradition and healthy mistrust of anything big and federal; laws were constructed to separate commercial from investment banking and, more particularly, to prevent state banks from merging one with another to create some overly dominant federal bank.

Both laws are in the process of being dismantled, though deregulation is not the immediate cause of this latest merger. Even after the latest mega-merger to hit corporate America - Chemical Bank and Chase Manhattan - the largest in the US in terms of assets is not much larger than our own Barclays, which is only number 22 in the hierarchy The reason for this is largely historic. Once apon a time, BankAmerica was the world's largest bank Today it is not even in the top 20. The company also restructured its holding in a Malaysian subsidiary Investment column, page 18..

The disposal will lead to an pounds 18.5m goodwill write-off. Spending on clothes rose by 33 percent compared with July last year to just under pounds 400m.. Deborah Willingham, vice president of support at Microsoft, apologised for the problems, but added that the company had 1,600 people working on support worldwide.. Credit and debit card spending soared with the warm weather in July, rising by 25 percent compared with the same month a year ago, to nearly pounds 6bn, according to the Credit Card Research Group.

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