Exporting Liquidity: Branch Banking and Financial Integration

Erik Gilje, Elena Loutskina and Philip E. Strahan

No 19403, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using exogenous deposit windfalls from oil and natural gas shale discoveries, we demonstrate that bank branch networks help integrate U.S. lending markets. We find that banks exposed to shale booms increase their mortgage lending in non-boom counties by 0.93% per 1% increase in deposits. This effect is present only in markets where banks have branches and is strongest for mortgages that are hard to securitize. Our findings suggest that contracting frictions limit the ability of arm's length finance to integrate credit markets fully. Branch networks continue to play an important role in financial integration, despite the development of securitization markets.

JEL-codes: G21 (search for similar items in EconPapers)
Date: 2013-09
Note: CF
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Published as "Exporting Liquidity: Branch Banking and Financial Integration," Journal of Finance, Volume 71, Issue 3, June 2016, Pages: 1159–1184.

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