Has Dodd–Frank affected bank expenses?

Thomas Hogan () and Scott Burns ()
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Scott Burns: Ursinus College

Journal of Regulatory Economics, 2019, vol. 55, issue 2, No 5, 214-236

Abstract: Abstract This paper examines the potential effects of the Dodd–Frank Act of 2010 on banks’ noninterest expenses. Using data on U.S. bank holding companies from 1995 through 2016, we test whether noninterest expenses increase following the passage of the Dodd–Frank Act or in relation to the number of banking regulations implemented after Dodd–Frank. We analyze subsamples of banks above and below $10 billion in total assets and consider total noninterest expenses, salaries, non-salary expenses, and specific subcategories of non-salary expenses: legal, consulting, auditing, and data processing. Non-salary expenses for both large and small banks show a one-time increase after Dodd–Frank, while salary expenses tend to increase with regulations. The results indicate that total noninterest expenses for the banking system are higher on average by more than $50 billion per year compared to before the Dodd–Frank Act.

Keywords: Dodd–Frank; Bank expenses; Regulation; Compliance; Federal reserve (search for similar items in EconPapers)
JEL-codes: E58 G21 G28 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (7)

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DOI: 10.1007/s11149-019-09379-8

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