An Analysis of Federal Regulatory Decisions on Market Extension Bank Mergers

trend has emerged in antitrust litigation of bank merger cases. The problem of potential competition has become a principal focus of the Department of Justice in contesting market extension bank mergers.l Of the 35 cases challenged by the Justice Department between 1966 and 1972, 14 involved potential competition considerations. Whereas only one of the eight suits filed by the Justice Department under the Bank Merger Act of 1960 was of the potential competition variety.2 A major issue related to the question of potential competition in market extension bank merger cases (i.e., proposed acquisition of a bank operating in a separate market) concerns the probability that the merger applicant would become a competitor in the market of the proposed acquired bank through de novo branch entry if the merger were denied.3 However, federal regulators have remained either unwilling or unable to define their guidelines for deciding cases on potential competi-