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Big Bad Banks? The Winners and Losers From Bank Deregulation in the United States

Author

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  • Beck, T.H.L.

    (Tilburg University, Center For Economic Research)

  • Levine, R.
  • Levkov, A.

Abstract

We assess the impact of bank deregulation on the distribution of income in the United States. From the 1970s through the 1990s, most states removed restrictions on intrastate branching, which intensified bank competition and improved bank performance. Exploiting the cross-state, cross-time variation in the timing of branch deregulation, we find that deregulation materially tightened the distribution of income by boosting incomes in the lower part of the income distribution while having little impact on incomes above the median. The results suggest that regulatory impediment to competition among banks during the 20th century were disproportionally harmful to lower income workers.

Suggested Citation

  • Beck, T.H.L. & Levine, R. & Levkov, A., 2009. "Big Bad Banks? The Winners and Losers From Bank Deregulation in the United States," Discussion Paper 2009-56, Tilburg University, Center for Economic Research.
  • Handle: RePEc:tiu:tiucen:d02bd971-3f22-46fb-82a9-c23e2f661e0a
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    More about this item

    Keywords

    Financial Institutions; Government Policy and Regulation; Income Inequality;

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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