Have borrower concentration limits encouraged bank consolidation?
Bank consolidation has been going on for more than a decade, in part the result of legislative and regulatory changes and in part a reflection of the large number of banks that became financially troubled in the late 1980s and early 1990s. However, the rapid consolidation of institutions still continues, even though the health of most banks has improved and many states long ago liberalized regulations on intrastate branching and interstate merging. This suggests that other factors may also be playing an important role. The large number of mergers involving target banks with assets under $100 million and the preponderance of mergers where both target and acquirer are small banks suggest that some of the merger activity may be an attempt to overcome limitations imposed by small size, such as borrower concentration limits. The fastest-growing segment of the lending market is loans over $1 million, and borrower concentration limits prevent the smallest banks from servicing such loans. This article examines motivations for bank mergers and their regional patterns, and then considers the outlook for further bank consolidation.
Volume (Year): (1997)
Issue (Month): Jan ()
|Contact details of provider:|| Postal: |
Web page: http://www.bos.frb.org/Email:
More information through EDIRC
|Order Information:|| Email: |
When requesting a correction, please mention this item's handle: RePEc:fip:fedbne:y:1997:i:jan:p:37-47. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Catherine Spozio)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.