BANKS Federal Reserve approves merger

The $5.8 billion deal will eliminate 10,000 jobs.
WASHINGTON (AP) -- The Federal Reserve cleared the way for Wall Street powerhouse J.P. Morgan Chase & amp; Co. to combine with Chicago-based Bank One Corp., forming the nation's second-largest bank with more than $1 trillion in assets.
The Fed's board of governors, including Chairman Alan Greenspan, voted 6-0 Monday to approve the megamerger, finding that the investment firm's acquisition of the bank would not threaten competition or unduly concentrate banking resources.
The $58 billion deal will eliminate about 10,000 jobs by 2006 and the Bank One name sooner, in one of a series of consolidations in the financial services industry. Some experts believe the combination will shift the U.S. banking industry landscape, setting off a cascade of deals among midsized institutions while creating opportunities for community banks to steal customers away.
Competition
The central bank's order noted that J.P. Morgan Chase and Bank One "compete directly" in seven markets in Delaware, Florida and Texas. The Justice Department, in a separate review, also concluded and advised the Fed that the merger "likely would not have a significantly adverse effect on competition in any relevant market."
Following the Fed's announcement, the two companies said they had set 12:01 a.m. on July 1 as the effective time of their merger. Both banks' shareholders have approved the all-stock merger, as have state regulators.
New York-based J.P. Morgan Chase already is the No. 2 U.S. bank, with assets of some $801 billion and operations in more than 50 countries. Bank One, the sixth-biggest bank with branches in 13 Midwest and Southwest states and in Florida, has $320 billion in assets and over 51 million credit cards issued.
The new institution, with about 2,300 branches, will have assets estimated at $1.12 trillion, trailing only titan Citigroup Inc. It will be based in New York but will retain Chicago as the base for some retail operations.
Losing a Fortune 100 company will be a blow to Chicago, which has lost several large corporations in recent years.