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Merging U.S. banks have eye on rising interest rates

Reuters Breakingviews delivers agenda-setting financial insight. Its global correspondents react to stories as they develop, delivering sharp and provocative commentary on big financial news as it breaks. Read more international insights here.

Executives at America’s legion of small lenders could learn a couple of things from two merging New York rivals. Provident New York Bancorp and Sterling Bancorp agreed to a $344-million (U.S.) merger with a $7-billion balance sheet on Thursday. So far, so unremarkable. But the deal also leaves the two even better positioned to handle one of the biggest problems looming for community banks: rising interest rates.