Muscling Up to the Big Guys

The Supreme Court boosts regional banks

Few struggles in American industry are fiercer than the one now being waged between the Davids and Goliaths of the banking world. As such giants as Citicorp, Chase Manhattan and Bank of America press their campaign for unlimited interstate banking, smaller lenders are fighting back. Last week the Supreme Court dealt the big guys a major blow. In an 8-to-0 vote, the court ruled that local institutions can form regional networks that shut out larger rivals based in other states.

The decision upheld the so-called New England Compact, which allows mergers across state lines by banks in the region. With the...

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