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Banks, regions and development after the crisis and under the new regulatory system

Author

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  • Pietro Alessandrini

    () (Università Politecnica delle Marche, MoFiR)

  • Michele Fratianni

    () (Indiana University, Kelly School of Business, Bloomington US, Univ. Plitecn ica Marche and MoFiR)

  • Luca Papi

    () (Università Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali, MoFiR)

  • Alberto Zazzaro

    () (Università Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali, MoFiR - Ancona, Italy, CSEF, Naples, Italy)

Abstract

One of the most evident consequences of the Great Financial Crisis has been a rapid expansion of banking regulation. We argue that the burden of the new regulatory system is asymmetric, driving small banks to the "too-small-to-survive" zone, while reinforcing the "too-big-to-fail" protection for big banks. The asymmetric effect on banking structure produces related asymmetries on firms and regional economies, in light of the fact that small firms and peripheral regions are highly dependent on bank credit and need strategic proximity of banking structures. Finally, our review of the literature on different countries and on different periods of time, including the financial crisis years, suggests the importance of a differentiated banking model when firms and regions are heterogeneous. There is no obvious optimal size of bank.

Suggested Citation

  • Pietro Alessandrini & Michele Fratianni & Luca Papi & Alberto Zazzaro, 2016. "Banks, regions and development after the crisis and under the new regulatory system," Mo.Fi.R. Working Papers 124, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
  • Handle: RePEc:anc:wmofir:124
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    References listed on IDEAS

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    Cited by:

    1. Michele Fratianni, 2017. "It is time to separate money banks from credit banks in Italy," Mo.Fi.R. Working Papers 138, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    2. Pietro Alessandrini & Luca Papi, 2018. "Banche locali e piccole imprese dopo la crisi tra nuove regole e innovazioni digitali," Mo.Fi.R. Working Papers 148, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    3. Flögel, Franz & Gärtner, Stefan, 2018. "Regionale Banken erhalten, aber wie? Bankensysteme in Spanien, Deutschland und Vereinigtem Königreich im Vergleich," Forschung Aktuell 04/2018, Institut Arbeit und Technik (IAT), Westfälische Hochschule, University of Applied Sciences.

    More about this item

    Keywords

    financial crisis; regulation; small banks; large banks; asymmetries; heterogeneity;

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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