Why are banks merging?
A) because they want fewer customers
B) because they want to reduce operating costs per customer
C) to shrink their geographical reach
D) to reduce risk of bad loans to one area
E) to reduce the number of branches

Question

Quizplus · Accepted Answer

Banks merge in order to reduce their operating costs per customer. By joining forces, they can eliminate duplicate services and consolidate their staff, which can lead to significant cost savings.

Answer: D 
 Another reason why banks merge is to reduce the risk of bad loans that are concentrated in one particular area. By combining their resources, banks can spread their risk more broadly and reduce the impact of any loan defaults or economic downturns in a particular region.

Why Are Banks Merging