IBBEA Implementation and the Relative Profitablility of Small Banks

Srinivas Nippanni and Kenneth M. Washer
Additional contact information
Srinivas Nippanni: Texas A&M University-Commerce
Kenneth M. Washer: Texas A&M University-Commerce

American Journal of Business, 2005, vol. 20, issue 2, pages 19-23

Abstract: The enactment of Riegle-Neal IBBEA in 1994 encouraged bank mergers and acquisitions. Empirical evidence indicates that large banks beneÞted from IBBEA enactment. However, there is little, if any, evidence of the impact of the act on small banksÕ proÞtability relative to large banks. This study examines the impact of IBBEA on the performance of small banks in the period preceding and following IBBEA implementation. Evidence is presented that indicates the return on assets of small banks was signiÞ cantly less than that of larger banks in the post-IBBEA period. This is contrary to the results of the pre-IBBEA period when small banksÕ proÞtability was competitive with and in some cases even better than large banksÕ proÞtability. It is concluded that the enactment of IBBEA has placed small banks at a competitive disadvantage which could eventually lead to their demise.

Keywords: Finance; Riegle-Neal IBBEA (search for similar items in EconPapers)
JEL-codes: R00 Z0 (search for similar items in EconPapers)

Downloads: (external link)
http://www.bsu.edu/mcobwin/majb/?p=63 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Access Statistics for this article

More articles in American Journal of Business from American Journal of Business (Formerly Named "Mid-American Journal of Business")
Contact information at EDIRC.
Series data maintained by Judy Lane ().