Allan: Agree completely. One of the problems – and this gets back to incentives – is that a large portion of a bank CEO’s (and the other folks in the C-suite) pay is essentially tied to the size of the institution. So, even uneconomic transactions for the acquiror are often pushed forward because management benefits.
Every academic study ever conducted on banking efficiency has found that once you get to a couple of billion in assets (which is a pretty small bank in relative terms), economies of scale are offset by diseconomies of management bureaucracy.
Ego and Greed (the bad kind, not the socially beneficial kind) have gotten us here.
