The Bank Merger Act of 1960 (Public Law 86-463, 86th Congress) requires the appropriate regulatory agency (Comptroller, the Federal Reserve Board of Governors, or FDIC), in considering an application for a bank merger to take into account two sets of factors: the effect on competition (including any tendency toward monopoly) and the effect on the banking factors. The banking factors mentioned in the Act are the familiar ones: financial history and condition of each bank, the adequacy of its management, and the convenience and needs of the community to be served. The law further states that the regulatory agency "shall not approve the transaction unless, after considering all of such factors, it finds the transaction to be in the public interest."' It is the purpose of this paper to explore from the point of view of public policy the probable effects of bank mergers on the two factors mentioned in the Act, bank competition and the banking factors.2