Explaining U.S. Commercial Bank Births, Deaths, and Marriages
The last twenty years of the twentieth century witnessed regulatory change not seen since the Great Depression. That regulatory change, culminating with the Interstate Banking and Branching Efficiency Act of 1994, produced a significant consolidation within the banking industry, resulting from mergers and failures, that accelerated near the end of the century. Unlike the mergers and failures, the large numbers of new entrants did not receive the same attention. Nonetheless, the new entrants tempered the decline in the overall number of banking institutions. This paper examines correlates with the number of bank new-charters, failures, and mergers during the 1980s and 1990s. We employ the fixed- and random-effect regression technique -- employing a normal, Poisson, and negative binomial distributions. Among the results, we find that increases in the number of branches relative to the number of banks significantly associate with fewer new charters (births) and more mergers (marriages). Interestingly, increasing the number of offices (banks plus branches) significantly associates with more deaths (failures).
|Date of creation:||Feb 2002|
|Date of revision:|
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- Stephen M. Miller & Yongil Jeon, 2003.
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2005-24, University of Connecticut, Department of Economics.
- Yongil Jeon & Stephen M. Miller, 2002. "Has Deregulation Affected Births, Deaths, and Marriages in the U.S. Commercial Banking Industry?," Working papers 2002-26, University of Connecticut, Department of Economics.
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