WASHINGTON, July 22 (Reuters) - Senator Elizabeth Warren

has warned BNY that its reported interest in a merger

with Northern Trust ( NTRS ) could violate federal banking laws,

saying any potential deal between the two large custody banks

raises antitrust concerns.

Warren, the top Democrat on the Senate Banking Committee and

a longtime big bank critic, told BNY CEO Robin Vince in a letter

sent Tuesday that such a deal, which would combine the world's

largest custody bank with a major competitor, would pose major

financial stability concerns, and asked for a briefing on the

status of potential talks, as well as any ongoing discussions

with regulators.

BNY declined to comment on the letter, and Northern Trust ( NTRS )

did not respond to a request for comment.

"Pursuing a merger that drastically consolidates a key

market while supercharging the firm's risk profile and systemic

importance is irresponsible and may also violate federal banking

laws," she wrote in a letter seen by Reuters.

In June, The Wall Street Journal reported that BNY

approached Northern Trust ( NTRS ) to express interest in a merger,

although Northern Trust ( NTRS ) has said it wants to remain independent.

BNY declined to comment on the original report.

Interest in potential deals between larger banks has been on

the rise as regulators appointed by President Donald Trump have

discussed refining the merger review process after the Biden

administration was cool to transactions among larger firms.

But Warren said such a deal would result in an institution

with a custodial services market share of over 30%, raising

competition concerns and breaching antitrust law.

"Further entrenching its already-dominant market position

would enable BNY to hike fees and increase prices, undermine its

incentives to innovate, erode its customer service, and reduce

the already-limited choices available for institutional clients

looking for custodial services," she wrote.

(Editing by Aurora Ellis)