Search Results
Working Paper
Multimarket bank pricing: an empirical investigation of deposit interest rates
In recent years, the number of large, geographically diversified banking organizations operating in the U.S. has grown. Empirical studies have found that, at least in the case of deposit interest rates, many of these banks offer the same rate for a given type of account throughout a state, or, in some cases, a broader geographical area. This phenomenon of uniform pricing raises questions as to what competitive factors are relevant in explaining the deposit interest rates offered by large multimarket banks. In this paper, we provide empirical evidence regarding the determinants of the deposit ...
Working Paper
Community Bank Performance: How Important are Managers?
Community banks have long played an important role in the U.S. economy, providing loans and other financial services to households and small businesses within their local markets. In recent years, technological and legal developments, as well as changes in the business strategies of larger banks and non-bank financial service providers, have purportedly made it more difficult for community banks to attract and retain customers, and hence to survive. Indeed, the number of community banks and the shares of bank branches, deposits, banking assets, and small business loans held by community banks ...
Working Paper
To surcharge or not to surcharge: an empirical investigation of ATM pricing
This paper investigates depository institutions' decisions whether or not to impose surcharges (direct usage fees) on non-depositors who use their ATMs. In addition to documenting patterns of surcharging, we examine motives for surcharging, including both direct generation of fee revenue and the potential to attract deposit customers who wish to avoid incurring surcharges at an institution's ATMs. Consistent with expectations, we find that the probability of surcharging increases with both the institution's share of market ATMs and the time since surcharging was first allowed in the state, ...
Working Paper
The profitability of small, single-market banks in an era of multimarket banking
This paper examines the relationship between multimarket bank presence and the profitability (and therefore viability) of small, single-market banks. We find that increased presence of multimarket banks is associated with a significant reduction in the profitability of small, single-market banks operating in rural banking markets, but not of those operating in urban markets. We explore this relationship by breaking single-market bank profits down into several components in order to shed light on the mechanisms through which multimarket bank presence might influence the profitability of ...
Working Paper
Determinants of the locations of payday lenders, pawnshops and check-cashing outlets
A large and growing number of low-to-moderate income U.S. households rely upon alternative financial service providers (AFSPs) for a variety of credit products and transaction services, including payday loans, pawn loans, automobile title loans, tax refund anticipation loans and check-cashing services. The rapid growth of this segment of the financial services industry over the past decade has been quite controversial. One aspect of the controversy involves the location decisions of AFSPs. This study examines the determinants of the locations of three types of AFSPs--payday lenders, ...
Working Paper
The competitive implications of multimarket bank branching
Regulators and research economists typically view retail banking markets as locally limited, spanning an area that can often be approximated by a metropolitan area or a rural county. Banks are assumed to set retail prices based on the conditions of supply and demand prevailing within these local market areas. However, recent studies have found evidence that large, multimarket banking organizations tend to offer uniform interest rates for retail deposit accounts of a particular type throughout the area that they serve, at least within a given state. This uniform pricing phenomenon raises ...
Working Paper
Interchange fees and payment card networks: economics, industry developments, and policy issues
In many countries around the world, electronic card-based payments have been replacing older types of payments at a rapid rate. In the United States, use of both debit cards and credit cards has been rising rapidly, while check volumes have been declining. The increased use of electronic payment methods has generated a number of public policy debates. One prominent debate concerns interchange fees. This paper is intended to provide background for understanding the interchange fee debate. The paper describes the operation of a typical payment card system, presents a summary of the economic ...
Journal Article
Thrift involvement in commercial and industrial lending
How important a role do thrift institutions play in local banking market competition? This article looks at a key aspect of that issue by examining the commercial and industrial lending of commercial banks and thrifts during the 1990s. Generally, thrifts were far less involved in C&I lending than banks during the period, but their involvement varied considerably with such factors as local deposit market concentration and institution size, charter type, and ownership status.
Conference Paper
Bank merger activity: the antitrust perspective
Working Paper
The evolving relationship between community banks and small businesses: evidence from the Surveys of Small Business Finances
This paper uses data from the Federal Reserve Board?s 1998 and 2003 Surveys of Small Business Finances (SSBFs) to examine the evolving relationship between community banks and small businesses. The SSBFs provide extensive data on the types of financial services used by small businesses and the sources of those services. These data allow us to answer a number of interesting questions regarding small business usage of community banks, including the following: To what extent do small businesses rely on community banks as providers of at least some financial services? What types of financial ...