• MSNBC , Friday, November 7, 2008 11 AM

Bank of America, JPMorgan Chase and Wells Fargo now control more than 32% of U.S. deposits, more than the top five banks controlled a year ago. The new oligopoly raises troubling questions about regulation and competition, Eve Tahmincioglu writes.

Perhaps even more surprising is that Citigroup -- ranked by Forbes as the world's biggest company as recently as 2005 -- is not only not among the Top 3, it's a real laggard at No. 4 with 3.5% market share compared to No. 3, JPMorgan Chase at 10.2%.

Existing federal banking laws say that no bank can have more than 10% of the domestic deposit market -- a threshold recently surpassed by all three superbanks. A Justice Department official is noncommittal about any action that might be taken, according to Tahmincioglu. "It's always something we've looked at and will continue to look at," spokeswoman Gina Talamona told her.

The reason limits on market share were put in place were so banks didn't get so big they'd become monopolies that could risk the whole economy, according to Atul Gupta, finance department chair for Bentley University in Boston. But the government appears to be pushing banks in the direction of more consolidation with its bailout package.

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