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Washington Outlook: Capital Wrapup


staff review of the economics of bank mergers is causing turmoil at the Federal Reserve. The Fed is urging banks that serve overlapping markets to combine, in hopes of producing a more efficient financial system. But staff antitrust economists have found that cost savings from such mergers are realized slowly, if ever. A story about the internal review in American Banker, a trade newspaper, set off a search for leakers at the central bank. Although there has been no public word of any disciplinary action, a Federal Reserve official says: "Confessions were obtained."EDITED BY STEPHEN H. WILDSTROM

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