Bank on this: if recent mergers serve as a guide to the future, the brave new world of financial services means higher costs for consumers, at least initially. The banking industry has rolled up six straight years of record profits, fed by massive consolidations and the application of new technologies. The industry's net income hit $59.2 billion last year, up 13% from 1996, with fewer but larger institutions. According to the FDIC, last year 599 bank mergers took place, reducing the number of banks to 9,143 from nearly 14,000 just 10 years earlier.
The process of consolidation, as the banks love...
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