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“It’s The End of Bank Branching As We Know It (And We Feel Fine)”

Author

Listed:
  • Jan Keil

    (Humboldt University of Berlin)

  • Steven Ongena

    (University of Zurich - Department of Banking and Finance; Swiss Finance Institute; KU Leuven; Centre for Economic Policy Research (CEPR))

Abstract

Banks are closing branches at an unprecedented rate. In some OECD countries, four out of five branches have been or will be closed, while in the US more than 10,000 branches representing eleven percent of its stock in 2009 have been closed by now. To understand the drivers of this fundamental transformation, we study a 15-year panel covering 36 OECD countries and 40 years of county and branch level data from the US. We find that technological progression corresponds to branch closure across countries, but plays less of a discernible local or branch-specific role. In contrast, bank fragility and especially consolidation through mergers and acquisitions robustly explain the de-branching we observe at all levels.

Suggested Citation

  • Jan Keil & Steven Ongena, 2020. "“It’s The End of Bank Branching As We Know It (And We Feel Fine)”," Swiss Finance Institute Research Paper Series 20-83, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp2083
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    More about this item

    Keywords

    branches; banking; technology; bank health; mergers;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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