It’s The End of Bank Branching As We Know It (And We Feel Fine)

Jan Keil and Steven Ongena
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Jan Keil: Humboldt University of Berlin

No 20-83, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: Banks are closing branches at an unprecedented rate. In some OECD countries, four out of five branches have been or will be closed, while in the US more than 10,000 branches representing eleven percent of its stock in 2009 have been closed by now. To understand the drivers of this fundamental transformation, we study a 15-year panel covering 36 OECD countries and 40 years of county and branch level data from the US. We find that technological progression corresponds to branch closure across countries, but plays less of a discernible local or branch-specific role. In contrast, bank fragility and especially consolidation through mergers and acquisitions robustly explain the de-branching we observe at all levels.

Keywords: branches; banking; technology; bank health; mergers (search for similar items in EconPapers)
JEL-codes: G21 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2020-09
New Economics Papers: this item is included in nep-ban
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2083

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