Rising Bank Concentration
P. Dean Corbae () and
Pablo D'Erasmo ()
No 26838, NBER Working Papers from National Bureau of Economic Research, Inc
Concentration of insured deposit funding among the top four commercial banks in the U.S. has risen from 15% in 1984 to 44% in 2018, a roughly three-fold increase. Regulation has often been attributed as a factor in that increase. The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 removed many of the restrictions on opening bank branches across state lines. We interpret the Riegle-Neal act as lowering the cost of expanding a bank's funding base. In this paper, we build an industry equilibrium model in which banks endogenously climb a funding base ladder. Rising concentration occurs along a transition path between two steady states after branching costs decline.
JEL-codes: E44 G21 L11 L13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-com, nep-ind and nep-mac
Note: CF EFG IO ME
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed
Published as Dean Corbae & Pablo D’Erasmo, 2020. "Rising Bank Concentration," Journal of Economic Dynamics and Control
Downloads: (external link)
Journal Article: Rising bank concentration (2020)
Working Paper: Rising Bank Concentration (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:26838
Ordering information: This working paper can be ordered from
Access Statistics for this paper
More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().