Bank Integration and State Business Cycles

Donald Morgan, Bertrand Rime and Philip E. Strahan
Additional contact information
Bertrand Rime: Swiss National Bank
Philip E. Strahan: Swiss National Bank

No 30, SIFR Research Report Series from Institute for Financial Research

Abstract: We investigate how integration of bank ownership across states has affected economic volatility within states. In theory, bank integration could cause higher or lower volatility, depending on whether credit supply or credit demand shocks predominate. In fact, year-to-year fluctuations in a state's economic growth fall as its banks become more integrated (via holding companies) with banks in other states. As the bank linkages between any pair of states increases, fluctuations in those two states tend to converge. We conclude that interstate banking has made state business cycles smaller, but more alike.

Keywords: Bank integration; Business volatility; Geographic diversification (search for similar items in EconPapers)
JEL-codes: E32 E50 G21 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2004-09-15
New Economics Papers: this item is included in nep-bec, nep-fin and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (270)

Downloads: (external link)
http://www.sifr.org/PDFs/sifr-wp30.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
Working Paper: Bank Integration and State Business Cycles (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:sifrwp:0030

Access Statistics for this paper

More papers in SIFR Research Report Series from Institute for Financial Research Institute for Financial Research Drottninggatan 89, SE-113 60 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Anki Helmer ().