The author finds that, despite a recovery of overall business lending by U. banks after the financial crisis, small business lending remained depressed, particularly among large banks and banks in worse financial condition.
This paper finds that acquisitions of community banks by non-local acquiring banks (without a local presence) lead to declines in local small business lending.
The model, which relies solely on publicly available data, offers community banks the opportunity to analyze risks from a perspective that otherwise could be prohibitively expensive for them to consider.
This paper provides evidence of a “favoritism bias” by which banks make more loans, and open more branches, in areas near the birthplaces of their CEOs.
[more] Financial systems of different countries have become more interconnected in recent years.
Research Papers On Banking
This process of financial integration allows for a better diversification of risks.While efficiency of the host country’s banking market can be improved through the entry of foreign banks, cross-border activities can transmit shocks.This reveals the necessity of supranational regulation and supervision.The authors show that big banks are expanding primarily within urban areas.While small banks are doing relatively worse in these areas, big bank expansion is actually helping small banks by removing a competitor from their market.Further analysis indicates that remote lenders have greater market share in counties where SBA loans from traditional banks were less common.The authors analyze the small business lending practices of banks using a nationally-representative survey conducted by the Federal Deposit Insurance Corporation.The authors conclude that increased competition can lead to large changes in credit policy at institutions outside the traditional supervisory umbrella, possibly creating a less stable financial system.This paper examines the effects of big bank merger activity of small bank health.Cross-border linkages of banks can transmit liquidity shocks from one country to another.This has become obvious during the recent financial crisis, where internationally active banks played an important role in the transmission of shocks.