[frgtpsswrdlame]

I don't understand your point. I think it's apparent to almost anyone that you need a fair amount of startup capital to start a bank. And when you go on to say:

>I don't think there's any natural motivation for bank consolidation besides using scale to eek out efficiencies and to gain power and influence.

Are efficiencies and power-seeking somehow not enough? I mean let's look at Standard Oil. What did Rockefeller do other than eek out efficiencies and try to gain power and influence? Efficiences are what defines a natural monopoly, we can't just throw it out.

[pavpanchekha]

Standard Oil is an interesting case. One of the things that made SO such a powerful monopoly (among many other things; I'm focusing only on business structure here) was the infrastructure it built up for transporting, refining, and selling oil. That is very capital-intensive, a situation a bit like (say) Comcast, whose businesses is protected by the large investments a competitor might need to make in laying fiber.

A good comparison might be shale oil companies, which largely are pretty small; Chesapeake, one of the most famous, has a market cap of 4.3B (so about the size of a tech unicorn). Shale oil companies, of course, are largely using oil and gas infrastructure built by years ago, so there isn't a competitive advantage keeping large companies afloat.

I think the parent is asking which of these examples banks are more like. Is there some sort of hidden infrastructure banks need to build before they're competitive—a total position database, or operating licenses in a bunch of markets, or an algorithmic trading platform—or can small banks largely compete with bigger banks? Like SO or CHK?