The Small Bank Slide–regulations can distort firm size

In a competitive market with free entry, bank size doesn’t really matter, but regulations can distortNew charts just released by the Mercatus Center at George Mason University paint a portrait of that concentration. As the charts show, the concentration trend did not begin with Dodd-Frank, but Dodd-Frank certainly won’t halt that decline either.

At a recent Senate Banking Committee hearing on Federal Reserve reforms, Professor Allan Meltzer suggested that bank concentration is being driven by the new regulations that disproportionately affect small banks….

Read the rest of the article, including graphs, on the Montana Chamber of Commerce’s blog here.

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