Shakeout won't shrink industry to a few mammoth banks

Analysts say that medium-sized banks may be unprofitable, and they predict further bank consolidations to effect economies of scale. However, a study reveals similar return on assets according to size of bank, and large banks surpassed very large banks in profitability in 1992 and 1993. The study analyzed net interest margin, overhead and non-interest income. Bankers revealed that they fear loss of income to non-bank competitors.
There is a consensus among economists, regulators, and the press in this country that further consolidation of the banking industry is inevitable, and that profit pressures are driving this consolidation. [...]