Two Centuries of U.S. Banking Concentration: 1820-2019

Caroline Fohlin and Matthew Jaremski

No 14516, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Concentration plays a key role in banking efficiency and stability, yet the literature lacks any long-run analysis of U.S. banking industry structure. This paper uses newly-collected archival data to provide the first study of banking concentration from the early years of the republic through 2019. While concentration was declining or stable before the mid-1920s, statistical tests identify a structural break thereafter, as concentration started steadily rising as a result of growth at the nation’s largest five banks, particularly those located in New York City. A second structural break in the mid-1990s further accelerated the upward trend in concentration before slowing down during the Great Recession.

Keywords: Bank concentration; Too big to fail (search for similar items in EconPapers)
JEL-codes: E44 G20 N11 (search for similar items in EconPapers)
Date: 2020-03
New Economics Papers: this item is included in nep-com, nep-his and nep-mac
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