U.S. Commercial Banking: Trends, Cycles, and Policy
This paper pinpoints sources of recent problems in U.S. commercial banking. The objective is to provide a context for evaluating policy options. There are three parts. The first documents how increased competition and financial innovation made banking less stable in the 1980s. The second part identifies the specific sources of the industry's difficulties over this decade. We find that the poor ex post performance by large banks provided the main stress on the system. From a variety of evidence, we conclude that this poor performance was the product of increased competition for the industry and a regulatory system that provides greater subsidies to risk-taking by large banks relative to the industry mean. The third part analyzes recent policy reforms and on-going policy options. in the light of our evidence on the main sources of problems in banking.
|Date of creation:||Jul 1993|
|Date of revision:|
|Publication status:||published as U.S. Commercial Banking: Trends, Cycles, and Policy , John H. Boyd, Mark Gertler. in NBER Macroeconomics Annual 1993, Volume 8 , Blanchard and Fischer. 1993|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Summers, Lawrence H, 1985. " On Economics and Finance," Journal of Finance, American Finance Association, vol. 40(3), pages 633-35, July.
- Merton, Robert C. & Bodie, Zvi, 1993. "Deposit insurance reform: a functional approach," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 38(1), pages 1-34, June.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:4404. 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: ()
If references are entirely missing, you can add them using this form.