The role of large banks in the recent U.S. banking crisis
This article argues that the poor performance of the U.S. banking industry in the 1980s was due mainly to the risk-taking of the largest banks, which was encouraged by the U.S. government's too-big-to-fail policy. The article documents the recent trend toward riskier bank portfolios and the corresponding decline in bank profitability. A breakdown of the data by location and by asset size reveals that bank problems were concentrated in areas with troubled industries (oil, real estate, and agriculture) and among banks with the largest assets. In a statistical study controlling for location, asset size remains a significant factor in bank performance. The article concludes with a rough quantitative estimate of the cost to the industry of the poor performance of large banks. ; The article is an abbreviated version of a paper published by MIT Press in the NBER Macroeconomics Annual 1993.
Volume (Year): (1994)
Issue (Month): Win ()
|Contact details of provider:|| Postal: |
Phone: (612) 204-5000
Web page: http://minneapolisfed.org/
More information through EDIRC
|Order Information:|| Web: http://www.minneapolisfed.org/pubs/ Email: |
When requesting a correction, please mention this item's handle: RePEc:fip:fedmqr:y:1994:i:win:p:2-21:n:v.18no.1. 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: (Janelle Ruswick)
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.