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Why does bank performance vary across states?

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Author Info
Michelle Clark Neely
David C. Wheelock

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Abstract

Since 1980, commercial bank earnings have varied widely across states. The authors find that much of this variation can be attributed to difference in economic conditions, and they suggest that interstate branching should promote a more stable banking system by enabling greater geographic diversification of bank operations. Differences in state banking laws and the presence of money centers in certain states, however, have caused bank earnings to vary from state to state and will continue to do so.

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Publisher Info
Article provided by Federal Reserve Bank of St. Louis in its journal Review.

Volume (Year): (1997)
Issue (Month): Mar ()
Pages: 27-40
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Handle: RePEc:fip:fedlrv:y:1997:i:mar:p:27-40

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Keywords: Banks and banking ; Bank profits;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Walker F. Todd, 1988. "Developing country lending and current banking conditions," Economic Review, Federal Reserve Bank of Cleveland, issue Q II, pages 27-36. [Downloadable!]
  2. Grammatikos, Theoharry & Saunders, Anthony, 1990. "Additions to bank loan-loss reserves : Good news or bad news?," Journal of Monetary Economics, Elsevier, vol. 25(2), pages 289-304, March. [Downloadable!] (restricted)
  3. Ausubel, Lawrence M, 1991. "The Failure of Competition in the Credit Card Market," American Economic Review, American Economic Association, vol. 81(1), pages 50-81, March.
  4. Joe Peek & Eric S. Rosengren, 1993. "Bank Real Estate And The New England Capital Crunch," Boston College Working Papers in Economics 246, Boston College Department of Economics.
  5. Cletus C. Coughlin & Thomas B. Mandelbaum, 1988. "Why have state per capita incomes diverged recently?," Review, Federal Reserve Bank of St. Louis, issue Sep, pages 24-36. [Downloadable!]
  6. R. Alton Gilbert, 1991. "Do bank holding companies act as "sources of strength" for their bank subsidiaries?," Review, Federal Reserve Bank of St. Louis, issue Jan, pages 3-18. [Downloadable!]
  7. Peter S. Rose, 1995. "Diversification and interstate banking," Proceedings, Federal Reserve Bank of Chicago, issue May, pages 296-313.
  8. Joe Peek & Eric S. Rosengren, 1994. "Bank Real Estate Lending and the New England Capital Crunch," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 22(1), pages 33-58. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. William Emmons & R. Gilbert & Timothy Yeager, 2004. "Reducing the Risk at Small Community Banks: Is it Size or Geographic Diversification that Matters?," Journal of Financial Services Research, Springer, vol. 25(2), pages 259-281, April. [Downloadable!] (restricted)
  2. Pierre-Guillaume Méon & Laurent Weill, 2005. "Can Mergers in Europe Help Banks Hedge Against Macroeconomic Risk?," Working Papers DULBEA 05-08.RS, Université libre de Bruxelles, Department of Applied Economics (DULBEA). [Downloadable!]
    Other versions:
  3. Thomas B. King & Daniel A. Nuxoll & Timothy J. Yeager, 2006. "Are the causes of bank distress changing? can researchers keep up?," Review, Federal Reserve Bank of St. Louis, issue Jan, pages 57-80. [Downloadable!]
  4. Timothy J. Yeager, 2002. "The demise of community banks? local economic shocks aren't to blame," Supervisory Policy Analysis Working Papers 2002-03, Federal Reserve Bank of St. Louis. [Downloadable!]
  5. Ridhwan, M.M. & Nijkamp, P. & Rietveld, P. & Groot, H.L.F. de, 2008. "Regional development and monetary policy : a review of the role of monetary unions, capital mobility and locational effects," Serie Research Memoranda 0007, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics. [Downloadable!]
  6. Jeffery W. Gunther & Kenneth J. Robinson, 1999. "Industry mix and lending environment variability: what does the average bank face," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q II, pages 24-31. [Downloadable!]
  7. Timothy J. Yeager, 2002. "Community bank performance in the presence of county economic shocks," Supervisory Policy Analysis Working Papers 2002-11, Federal Reserve Bank of St. Louis. [Downloadable!]
  8. Abdelaziz Rouabah, 2006. "La sensibilité de l'activité bancaire aux chocs macroéconomiques : une analyse en panel sur des données de banques luxembourgeoises," BCL working papers 21, Central Bank of Luxembourg. [Downloadable!]
  9. William R. Emmons & R. Alton Gilbert & Timothy J. Yeager, 2002. "Scale economies and geographic diversification as forces driving community bank mergers," Supervisory Policy Analysis Working Papers 2002-02, Federal Reserve Bank of St. Louis. [Downloadable!]
  10. William R. Emmons & R. Alton Gilbert & Timothy J. Yeager, 2001. "The importance of scale economies and geographic diversification in community bank mergers," Working Papers 2001-024, Federal Reserve Bank of St. Louis. [Downloadable!]
  11. Biswa Swarup Misra, . "The Performance of Regional Rural Banks (RRBs) in India:Has Past Anything to Suggest for Future?," Journals, esocialsciences.com. [Downloadable!]
  12. Frederick Furlong & John Krainer, 2007. "Regional economic conditions and the variability of rates of return in commercial banking," Working Paper Series 2007-21, Federal Reserve Bank of San Francisco. [Downloadable!]
  13. Panayiotis P. Athanasoglou & Matthaios D. Delis & Christos K. Staikouras, 2006. "Determinants of Bank Profitability in the South Eastern European Region," Working Papers 47, Bank of Greece. [Downloadable!]
    Other versions:
  14. Kris James Mitchener, 2004. "Bank Supervision, Regulation, and Instability During the Great Depression," NBER Working Papers 10475, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  15. Boyreau-Debray, Genevieve, 2003. "Financial intermediation and growth - Chinese style," Policy Research Working Paper Series 3027, The World Bank. [Downloadable!]
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