Data from CRSP tapes describing commercial banks were analyzed to study the effects of regulatory changes in the FDIC insurance rates that were intended to minimize any incentive for banks to take excessive lending risks. Results suggest that the Act increased the value of large banks and decreased the value of small banks. This leads to the conjecture that the this change may lead to greater consolidation in the U.S. banking industry and improve the competitive position of U.S. banks with respect to foreign banks.
banking, federal regulation, large banks, small banks, regulatory reform
The files in this collection are protected by copyright law. No commercial reproduction or distribution of these files is permitted without the written permission of Southern Methodist University, Cox Business School. These files may be freely used for educational purposes, provided they are not altered in any way, and Southern Methodist University is cited. For more information, contact firstname.lastname@example.org.