Citigroup Inc.'s takeover of Wachovia Corp.'s banking business will create a triumvirate of behemoths controlling nearly a third of U.S. deposits.

This year's massive consolidation - much of it pushed through on an emergency basis by regulators - is creating conditions that could eventually harm consumers and could lay the groundwork for an even bigger financial meltdown in the future, experts said.

"What's most amazing to us is that there's no public input or comment," said Matthew Lee, executive director of Inner City Press/Fair Finance Watch. "We are basically living under banking martial law," he said, "and the public has to stay inside their homes."

Yesterday's Citigroup-Wachovia deal, if it is approved by Wachovia shareholders, will give Citigroup - led by chief executive officer Vikram Pandit - a U.S. deposit market share of 9.79 percent, based on June 30 data from the Federal Deposit Insurance Corp.

Bank of America Corp., under CEO Kenneth Lewis, is on its way toward 12 percent market share with its purchase in July of Countrywide Financial Corp. and its pending acquisition of Merrill Lynch & Co. Inc.

JPMorgan Chase & Co., led by Jamie Dimon, boosted its market share to 9.75 percent with its purchase of the failed Washington Mutual Inc.

Given the crisis mentality in Washington and New York, little attention is being paid to what Lee called an unprecedented level of consolidation.

U.S. Sen. Arlen Specter (R., Pa.) said he was concerned about the concentration of banking power. "What the ramifications are, I'm trying to figure out," said Specter, who is a member of the Senate Judiciary Committee's Antitrust, Competition Policy and Consumer Rights subcommittee.

Specter said regulators were battling against deadlines to avoid bank failures. "They are rolling the dice to a certain extent on what the consequences might be."

Consumer advocates said bank customers would be worse off with giant banks' exerting power over the market.

"Greater consolidation in the banking industry leads to fewer choices and higher fees for consumers," said Ed Mierzwinski, consumer program director for U.S. Public Interest Research Group.

There is a downside for business, as well, said Robert White, of Blue Bell Commercial Credit.

"We already have banks that are out of touch with their everyday clients," said White, who helps smaller businesses get loans from banks. "And when you create a behemoth, you are just further alienating them."

Economists and finance experts were not so concerned about the consumer angle. They said there were still more than enough banks to ensure competition.

Their major concern is that the biggest banks are becoming unwieldy and too big to be transparent even to top managers, much less regulators. That increases the risk to our financial system, they said.

"If we have learned anything in the last six months, it is that some organizations are simply too big and too complex to manage, let alone to effectively supervise," said Cornelius Hurley, director of the Morin Center for Banking and Financial Law at the Boston University School of Law.

Barry Bosworth, an economist at the Brookings Institution, in Washington, shared a similar concern: "Large banks in themselves behave too much like lemmings" because of the way they set lending standards and propagate "credit-quality problems from one market to another."

Sandeep Dahiya, an associate professor of finance at Georgetown University, said that, by allowing bigger and even more complicated financial institutions to form, "we are doubling the stakes here for a future crisis."

The key in the future is whether federal regulators are up to the challenge of the massive institutions they are midwifing into existence.

Dean Baker, co-director of the Center for Economic and Policy Research, in Washington, said it was probably better for Wachovia to go to Citigroup than to have it land in the lap of the FDIC.

But "a year or two down the road," he said, speaking of the three giants, "maybe we don't want to break them up, but we do want to make sure they are very carefully regulated."