U.S. banking concentration, 1820–2019

Caroline Fohlin and Matthew Jaremski

Economics Letters, 2020, vol. 190, issue C

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
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:190:y:2020:i:c:s0165176520300926

DOI: 10.1016/j.econlet.2020.109104

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