Integration Among US Banks
Abhinav Anand () and
John Cotter ()
No 201913, Working Papers from Geary Institute, University College Dublin
We define and measure integration among a sample of 357 US banks over 25 years from 1993 to 2017 and show that the median US bank's integration has increased significantly post-2005. During the great recession and the Eurozone crisis, integration levels among US banks display a significant rise over and above their trend. We find that bank size is the most economically and statistically significant characteristic in explaining integration levels. Size and the equity ratio show positive association with bank integration while the net interest margin and combined tier 1 and tier 2 capital ratio influence bank integration negatively. For regulators, abnormally high integration levels indicate warning signs of potential distress in the banking sector.
Keywords: Bank integration; Bank size; Banking crises; Systemic risk; Principal component regressions (search for similar items in EconPapers)
JEL-codes: G10 G21 G28 C32 C33 C38 C58 (search for similar items in EconPapers)
Pages: 39 pages
New Economics Papers: this item is included in nep-ban
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Persistent link: https://EconPapers.repec.org/RePEc:ucd:wpaper:201913
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