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Industry mix and lending environment variability: what does the average bank face

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  • Jeffery W. Gunther
  • Kenneth J. Robinson

Abstract

Diversification opportunities for banks may be greater today because of the lessening of geographic restrictions. In addition, regional economies have undergone vast transformations, with relatively volatile industries often assuming a diminished role. To assess whether these changes have resulted in a more stable lending environment, Jeff Gunther and Ken Robinson form industry portfolios for banks based on their presence in different states and the mix of economic activity found in those states. The authors find that the risk underlying banks' lending environments declined from 1985 to 1996 because of both a geographic restructuring of the banking system and increasing industrial diversification of state economies.

Suggested Citation

  • 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.
  • Handle: RePEc:fip:fedder:y:1999:i:qii:p:24-31
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    File URL: http://www.dallasfed.org/assets/documents/research/efr/1999/efr9902c.pdf
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    Cited by:

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    2. Meon, Pierre-Guillaume & Weill, Laurent, 2004. "A view of the European Union as an evolving country portfolio," European Journal of Political Economy, Elsevier, vol. 20(4), pages 853-868, November.
    3. Colm Kearney & Frank Barry, 2005. "MNEs and Industrial Structure in Host Countries:A Mean Variance Analysis of Ireland’s Manufacturing Sector," The Institute for International Integration Studies Discussion Paper Series iiisdp023, IIIS.
    4. Yeager, Timothy J., 2004. "The demise of community banks? Local economic shocks are not to blame," Journal of Banking & Finance, Elsevier, vol. 28(9), pages 2135-2153, September.
    5. Kim Young Joo & Skibniewski Miroslaw J., 2020. "Unsuccessful bids: Coefficient of variation of bids as indicator of project risk," Organization, Technology and Management in Construction, Sciendo, vol. 12(1), pages 2193-2199, January.
    6. 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;Western Finance Association, vol. 25(2), pages 259-281, April.
    7. 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.
    8. 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.

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