TY - JOUR

T1 - US National Banks and Local Economic Fragility

AU - Calice, G

AU - Gam, YK

PY - 2022/4

Y1 - 2022/4

N2 - We examine the relationship between US national banks' local market shares and the economic fragility of the counties in which they operate. We find that counties with national banks that have large local market shares experience a greater fluctuation in their income growth in the subsequent year. Further, an increase in income growth is more pronounced during normal times but declines significantly in a distressed market. We further find that the national banks create greater liquidity during normal times and lower liquidity in distressed times. Overall, our results indicate that national banks may expose local economies to macro-level distress.

AB - We examine the relationship between US national banks' local market shares and the economic fragility of the counties in which they operate. We find that counties with national banks that have large local market shares experience a greater fluctuation in their income growth in the subsequent year. Further, an increase in income growth is more pronounced during normal times but declines significantly in a distressed market. We further find that the national banks create greater liquidity during normal times and lower liquidity in distressed times. Overall, our results indicate that national banks may expose local economies to macro-level distress.

U2 - 10.1007/s10693-022-00382-3

DO - 10.1007/s10693-022-00382-3

M3 - Article

VL - 63

SP - 313

EP - 338

JO - Journal of Financial Services Research

JF - Journal of Financial Services Research

SN - 0920-8550

IS - 3

ER -