Rising Bank Concentration Article Swipe
Related Concepts
Business
Financial system
Dean Corbae
,
Pablo D’Erasmo
·
YOU?
·
· 2020
· Open Access
·
· DOI: https://doi.org/10.21034/sr.594
· OA: W4285703247
YOU?
·
· 2020
· Open Access
·
· DOI: https://doi.org/10.21034/sr.594
· OA: W4285703247
Concentration of insured deposit funding among the top four commercial banks in the U.S. has risen from 15% in 1984 to 44% in 2018, a roughly three-fold increase.Regulation has often been attributed as a factor in that increase.The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 removed many of the restrictions on opening bank branches across state lines.We interpret the Riegle-Neal act as lowering the cost of expanding a bank's funding base.In this paper, we build an industry equilibrium model in which banks endogenously climb a funding base ladder.Rising concentration occurs along a transition path between two steady states after branching costs decline.
Related Topics
Finding more related topics…