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The case for interstate branch banking

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  • David L. Mengle

Abstract

During the 1980s, many states relaxed laws restricting branching, and most states opened up their borders to entry by out-of-state bank holding companies. This article suggests that both banks and consumers would benefit if laws were further modified to permit bank holding companies to consolidate their interstate subsidiaries into branch networks. While such a change is likely to lead to a smaller number of large banks (although those remaining would operate nationwide), there would probably be little change in the number of small banks serving local markets.

Suggested Citation

  • David L. Mengle, 1990. "The case for interstate branch banking," Economic Review, Federal Reserve Bank of Richmond, vol. 76(Nov), pages 3-17.
    • Handle: RePEc:fip:fedrer:y:1990:i:nov:p:3-17:n:v.76no.6
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    References listed on IDEAS

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    1. Sydney J. Key, 1989. "Mutual recognition: integration of the financial sector in the European Community," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Sep, pages 591-609.
    2. Jim Burke, 1984. "Antitrust laws, Justice department guidelines, and the limits of concentration in local banking markets," Staff Studies 138, Board of Governors of the Federal Reserve System (U.S.).
    3. Calomiris, Charles W., 1990. "Is Deposit Insurance Necessary? A Historical Perspective," The Journal of Economic History, Cambridge University Press, vol. 50(2), pages 283-295, June.
    4. Flannery, Mark J & James, Christopher M, 1984. "Market Evidence on the Effective Maturity of Bank Assets and Liabilities," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 16(4), pages 435-445, November.
    5. Evanoff, Douglas D, 1988. "Branch Banking and Service Accessibility," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 20(2), pages 191-202, May.
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    Cited by:

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    3. Hubert P. Janicki & Edward Simpson Prescott, 2006. "Changes in the size distribution of U.S. banks: 1960-2005," Economic Quarterly, Federal Reserve Bank of Richmond, vol. 92(Fall), pages 291-316.
    4. Cailin Slattery & Ariell Reshef, 2025. "Legislation, Regulation, and Litigation: Demand for US Legal Services in Historical Perspective," EconPol Forum, CESifo, vol. 26(02), pages 62-67, April.

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    Keywords

    Interstate banking; Branch banks;

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