The Effects of Bank Deregulation
Contrary to some expectations, liberalizing restrictions on interstate bank branching has diminished income inequities for many workers.
Title:
Big Bad Banks? The Impact of U.S. Branch Deregulation on Income Distribution
Authors:
Thorsten Beck, Ross Levine , and Alexey Levkov
Publisher:
National Bureau of Economic Research, Working Paper No. 13299
Date Published:
August 2007
There is much disagreement over the effect of bank regulations on the distribution of income. The authors studied the effects of widespread banking industry consolidation in the U.S. during the 1970s, ’80s, and ’90s, which was spurred by a wave of deregulation. They found that as banks expand across state lines, they tend to tighten the labor market and reduce income inequities between men and women and the skilled and unskilled.
Bottom Line:
Contrary to some expectations, liberalizing restrictions on interstate bank branching has diminished income inequities for many workers.
