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Why does bank performance vary across states?

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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.

Suggested Citation

  • Michelle Clark Neely & David C. Wheelock, 1997. "Why does bank performance vary across states?," Review, Federal Reserve Bank of St. Louis, issue Mar, pages 27-40.
  • Handle: RePEc:fip:fedlrv:y:1997:i:mar:p:27-40
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    References listed on IDEAS

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    Keywords

    Bank profits; Banks and banking;

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