Are Branch Banks Better Survivors? Evidence from the Depression Era
It is widely argued in the literature on the Great Depression that the prevalence of unit banks aggravated the problem of financial instability that afflicted the United States. This article tests the theory that more widespread branch banking would have reduced financial turbulence by examining the survival of individual branch and unit banks. Results indicate that instead of being more likely to survive, branch banks were more likely to fail. Further investigation suggests that this higher failure rate occurred because branch banks systematically held riskier portfolios than unit banks. (JEL G21, G28, N22) Copyright 2004, Oxford University Press.
Volume (Year): 42 (2004)
Issue (Month): 1 (January)
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