PAUL BOWLES 1 ASSESSING THE IMPACT OF PROPOSED BANK MERGERS ON RURAL COMMUNITIES: A CASE STUDY OF BRITISH COLUMBIA (Accepted 10 January, 1999) ABSTRACT. The restructuring of financial markets and financial institutions through bank mergers has been accompanied in many countries by concerns about the resulting ‘geography of finance’. In Canada, two proposed mergers involving four of the largest banks have raised concerns about the possible impacts of the proposed mergers on the access to financial institutions in rural Canada. This paper assesses the potential impact of the proposed mergers on the geography of finance in rural communities in British Columbia. The methodological choices which must be made to frame such an anlysis are discussed and include choices related to the definitions of ‘accessibility’, the ‘industry’, a ‘competitive industry’, a ‘bank branch’ and a ‘community’. A new Index is devised to measure the vulner- ability of rural communities to post-merger bank branch closures. It is concluded that the bank mergers will, if approved, have significant negative impacts for the accessibility of the banking system in rural British Columbia. It is also suggested that Canada needs to examine establishing a wider regulatory framework which addresses the issue of accessibility on a longer term basis. I. INTRODUCTION Financial markets and financial institutions are being restructured throughout the world. In some countries, notably, in Russia and in Asia, such restructuring is taking place in the face on financial instability and the threat of financial collapse. In other countries, such as those in North America and in Europe, restructuring is taking place in response to deregulation and global competitive pressures. In these latter countries, much of this restructuring is taking place through the rationalisation of banking activities through bank mergers. In the U.S., for example, there were over 6 300 bank mergers between 1980 and 1994 and more have been announced since partly as a result of the passage of the Branch Banking and Social Indicators Research 51: 17–40, 2000. © 2000 Kluwer Academic Publishers. Printed in the Netherlands.