In a sense, we had more banks than was/were necessary.
In a sense, we had more banks than were necessary. This was caused by government restrictions on interstate mergers and acquisitions and on bank branching.

Hi. Do both of the following versions work?
If they do, what’s the difference between them?
1. In a sense, we had more banks than were necessary.
2. In a sense, we had more banks than was necessary.

Question

In a sense, we had more banks than was/were necessary.
In a sense, we had more banks than were necessary. This was caused by government restrictions on interstate mergers and acquisitions and on bank branching.

Hi. Do both of the following versions work?
If they do, what’s the difference between them?
1. In a sense, we had more banks than were necessary. 
2. In a sense, we had more banks than was necessary.

Answer

One is correct, but many people will still say or write the 2nd version.

The first is correct because subjunctive tense ('were' in this example) is usually used for hypothetical situations or wishful thinking. 'In a sense, we had more banks' is not definitive/definite. It is hypothetical, so subjunctive tense should follow.

Answer

I think you already know this, but just to clarify, Greg is mistaken -- this isn't a use of the subjunctive.  The subjunctive is for hypothetical cases like "If there were more banks..." / "If there were a bank on this street..." / "Supposing I were to get a job at a bank..."  There's nothing hypothetical or wishful in your two sentences.  They just say that there were more banks than necessary.  It's the same as saying "I have more pens than I need."  It's not hypothetical.

I do agree with Greg, though, that "were" is the correct choice in this case, and "was" is incorrect.  I also think he's right that some people might still say "was."  Most people would just say "than necessary."