Regulation and the Public Interest in Banking

Geoffrey Jehle

MPRA Paper from University Library of Munich, Germany

Abstract: The rules that should govern competition and conduct in banking are currently the topics of spirited debate. This paper proposes a rigorous welfare-theoretic methodology which can provide a unifying focus for a wide range of regulatory and market structure issues in banking. The methodology is then applied in an empirical study of recent FDIC bank merger decisions. Evidence is found that potential welfare losses to borrowers and welfare gains to bank owners do influence the decisions taken, and that borrowers and bank owners receive roughly equal treatment by the regulator. The potential welfare losses to depositors, however, appear to be generally ignored.

Keywords: Banking; Regulation; Welfare; Mergers (search for similar items in EconPapers)
JEL-codes: D4 D6 G18 L5 (search for similar items in EconPapers)
Date: 1985-12
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:73414

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