“How Low Can Banks Go?”
In the December 1 issue of Forbes.com, Booz & Company Senior Partner Mike McKeon and Partner Seamus McMahon (North America) predicted that continuing financial problems may create a new U.S. banking landscape dominated by major banks. “A combination of constrained credit availability, anemic demand and intense deposit competition will put significant earnings pressure on the banks that remain,” they wrote. With several potential bank takeovers in process—among them Wells Fargo taking over Wachovia, JPMorgan Chase taking over Bear Stearns and Washington Mutual, and Citigroup also looking for a deal—McKeon and McMahon predicted that U.S. banking industry of the future could be one in which just four banks control 40 percent of U.S. deposits.