We show that bank-concentration at the US county-level increases industrial concentration. By exploiting discrepancies in the enforcement of bank-merger regulatory reviews, we formulate a fuzzy regression discontinuity design, with the dominant bank’s county-market share as an instrument for deposit concentration. Our baseline results provide evidence that deposit concentration increases industrial concentration measured by county-level labour Herfindahl-Hirschman Index (HHI), as well as dampens the entry and exit rate of non-financial firms at the county-level. We further explore heterogeneity in our results with respect to external financial dependence, the 2008 recession and regulatory forbearance. We explore whether concentration engenders incentives to lend sub-optimally in order to protect incumbents. We find that the mean banking market concentration is positively correlated with non-performing assets and loan restructuring at the bank-level.