Does geographic liberalization really hurt small banks?

Small bank market share has declined in almost every state since the early 1980s. In addition, many states have reduced their restrictions on intrastate branching and interstate holding company entry since that time. A study examines whether the removal of legal barriers on the geographic expansion...

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Bibliographic Details
Published in:Financial industry studies (Dallas, Tex.) Tex.), 1995-12, p.1
Main Author: Moore, Robert R
Format: Article
Language:English
Subjects:
Bank holding companies
Banking industry
Banking law
Branch banking
Competition
Interstate banking
Interstate Banking & Branching Efficiency Act 1994-US
Liberalization
Market positioning
Market shares
Regression analysis
Studies
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Summary:Small bank market share has declined in almost every state since the early 1980s. In addition, many states have reduced their restrictions on intrastate branching and interstate holding company entry since that time. A study examines whether the removal of legal barriers on the geographic expansion of banks had a significant impact on the market share of small banks. Using 2 different approaches, the study finds evidence that casts doubt on the view that the reduction in geographic banking restrictions has been the driving force behind the decline in small bank market share. These results suggest that the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 is not likely to have a major impact on the market share of small banks.
ISSN:1526-4076