Are Banks Really Special? New Evidence from the FDIC-Induced Failure of Healthy Banks

Recent bank failures are followed by significant and permanent negative declines in real county income. These declines are larger for small failures than for large failures per dollar of assets, are larger for bank failures than thrift failures, and are larger for bank closures than assisted mergers...

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Bibliographic Details
Published in:The American economic review 2005-12, Vol.95 (5), p.1712-1730
Main Author: Ashcraft, Adam B.
Format: Article
Language:English
Subjects:
Bank assets
Bank capital
Bank credit
Bank deposits
Bank failures
Bank holding companies
Bank loans
Bank markets
Banking industry
Banking regulation
Commercial banks
Deposit insurance
Economic activity
Economic statistics
Economic theory
Experiments
Loans
Macroeconomics
Shorter Papers
Statistical analysis
Studies
Subsidiaries
Subsidiary companies
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Summary:Recent bank failures are followed by significant and permanent negative declines in real county income. These declines are larger for small failures than for large failures per dollar of assets, are larger for bank failures than thrift failures, and are larger for bank closures than assisted mergers. More interestingly, the failure of even healthy banks has significant and permanent negative effects on economic activity.
ISSN:0002-8282
1944-7981
DOI:10.1257/000282805775014326