Regulation tends to add to overhead, hurting small businesses, protecting big businesses and spurring consolidation. The Dodd-Frank financial regulation bill tried to deal with the various economies of scale and the differing systemic importance of large and small banks by regulating bigger banks more than smaller banks.

What has been the effect?

One new study suggests a two-part result:

1) Small banks are merging to become bigger.

2) There are no new entrants to the big bank realm of $50 billion or more.

The study, "How the Dodd-Frank Act Affected Bank Acquisition Behavior," commissioned by the Manhattan Institute along with a handful of other studies on Dodd-Frank, raised this worry:

The conclusion raises concerns that Dodd-Frank has created a protected class of financial firms with assets above $50 billion, as smaller firms now have a reason not to reach that size.... Dodd-Frank did nothing to break up America's largest banks, but it also discourages new competition for the mega-banks that existed before Dodd-Frank.

This is what Jamie Dimon was talking about when he said Dodd-Frank creates a "moat" around the big banks. This is what Goldman execs lauded as "More intense regulatory and technology requirements have raised the barriers to entry higher than at any other time in modern history."

In short, here's a way to read this study: Dodd-Frank makes it too costly to be small, but also too costly to become big.

Timothy P. Carney, The Washington Examiner's commentary editor, can be contacted at His column appears Tuesday nights on