Models the long-run structural consolidation of U.S. banking — from 18,000+ institutions in 1984 to ~4,400 today — driven by M&A activity, regulatory economies of scale, and competitive pressure.
Scenario Parameters
Merger Activity Rate
Annual rate of voluntary mergers/acquisitions
0.025 /yr
Failure Rate
Annual rate of involuntary closures
0.004 /yr
New Charter Rate
Annual new bank formations (as fraction of existing)
0.001 /yr
Scale Economy Pressure
How strongly cost advantages drive consolidation
0.400idx
Structural Floor
Minimum viable institution count
2000 banks
Simulation Engine
Current year2026 / 2046
Playback speed1×
Time step (dt)0.05 yr
Simulation Period
→
20 yr span · 20 model years
Current Values
Institution Count
4,408 banks
Avg Assets per Bank ($M)
4.2B $M
Top-10 Market Share (%)
42.00 %
New Charters (annual)
4 count
Analyst Note
Run the simulation to completion, then generate a short written read on what the parameter mix produced and what it implies for the industry.
Historical Context
U.S. banks declined from 18,282 (1984) to 4,408 (2024) — a 76% reduction over 40 years.