In Japan, the consolidation among regional banks has been increasing, reflecting the deterioration of the business conditions under the negative interest rate policy. The government also said that legislation will be submitted to the Diet in 2020 that will exempt regional banks from the anti-monopoly law for 10 years to facilitate consolidation. Therefore, the current wave of consolidation will be accelerated in the near future. This study investigates the impact of regional bank consolidation on regional economies, using data on the location of bank branches at the municipal level. We consider the differences in two types of consolidation; mergers and the establishment of a bank holding company. We examine whether the changes in economic conditions of municipalities where the branches of consolidated regional banks existed differ from the other municipalities, using the difference-in-differences (DID) method. The major results of this study are summarized as follows: First, political variables have no significant impact on the regional economic indicators in the case of mergers. Second, in the case of bank holding companies, political variables have a significant impact on taxable income, local government tax revenues, and so on. Third, consistent results are obtained when excluding urban areas. These contrasting results between mergers and the establishment of a bank holding company indicate the potential benefits of the bank holding company structure, which can provide flexibility in structuring strategic transactions with existing entities.