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Journal Article
The Texas banking crisis and the payments system
The Federal Reserve System plays a crucial role in the payments system that is especially important during periods of financial turmoil. In this article, Robert Clair, Joanna Kolson, and Kenneth Robinson explain the process and the risks involved in clearing checks in the private sector. They compare these processes and risks with the essentially risk-free check-clearing service the Federal Reserve System offers. During banking crises, they hypothesize, banks will increase their check-clearing through the Federal Reserve to minimize their risk exposure. A model of Federal Reserve ...
Journal Article
Loan growth and loan quality: some preliminary evidence from Texas banks
Following the failures of depository institutions in the 1980s, many analysts concluded that the rapid growth of lending activity and the deterioration of loan quality were related. Robert T. Clair tests this relationship after separating loan growth by its source: increased lending to new or existing customers, bank mergers, and acquisitions of failed banks. The preliminary evidence suggests that additional lending to new or existing customers beyond what might be normal at a given stage of the business cycle lowers loan quality after a three-year lag. This relationship, based on evidence ...
Journal Article
Branch banking in Texas: implications for bank structure
Journal Article
Six causes of the credit crunch
Bank lending typically moves with the business cycle. In Texas from 1987 to 1992, however, bank loans declined while nonagricultural employment rose. Robert T. Clair and Paula Tucker consider this evidence of a constrained supply of bank loans, or credit crunch. ; Clair and Tucker find that multiple factors have reduced banks' willingness and ability to supply loans. The resolution of failed banks and thrifts, tightening of bank examination standards, new capital requirements, new regulations and increased enforcement of old regulations, and increased exposure to lawsuits have each had an ...
Journal Article
Performance of eleventh district banks in 1989: progress but not profits
Commercial banks in the Eleventh Federal Reserve District reduced their losses substantially in 1989 but still collectively reported a loss for the year. The improvement primarily resulted from increases in fee income. In addition, Eleventh District banks reduced their nonperforming loans and the costs associated with these loans. Despite the improvement, District banks still have relatively large holdings of nonperforming loans and repossessed real estate. ; Balance sheets of Eleventh District banks show the effects of correcting the problems of low-quality assets. Charging off nonperforming ...
Journal Article
Interstate banking and the Federal Reserve: a historical perspective
The U.S. banking system is unique in the industrialized world because it lacks nationwide banks. Historically, interstate banking was associated with other issues, such as monopolistic power and excessive political influence. This perception fueled public distaste for national banking. A more positive sentiment has emerged in recent years. Federal Reserve opinion evolved from one of strong opposition to interstate banking to one of acceptance. ; Clair and Tucker trace the rise and fall of opposition to interstate banking and explore banking developments during the twentieth century. They ...