US National Banks and Local Economic Fragility

Giovanni Calice () and Yong Kyu Gam ()
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Giovanni Calice: Loughborough University
Yong Kyu Gam: University College Dublin

Journal of Financial Services Research, 2023, vol. 63, issue 3, No 3, 313-338

Abstract: Abstract We examine the relationship between US national banks’ local market shares and the economic fragility of the counties in which they operate. We find that counties with national banks that have large local market shares experience a greater fluctuation in their income growth in the subsequent year. Further, an increase in income growth is more pronounced during normal times but declines significantly in a distressed market. We further find that the national banks create greater liquidity during normal times and lower liquidity in distressed times. Overall, our results indicate that national banks may expose local economies to macro-level distress.

Keywords: National banks; Branch networks; Local economy; Economic growth (search for similar items in EconPapers)
JEL-codes: E44 G21 G28 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s10693-022-00382-3

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