Big Bad Banks? The Winners and Losers From Bank Deregulation in the United States

T.H.L. Beck, R. Levine, A. Levkov

Research output: Working paperDiscussion paperOther research output

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Abstract

We assess the impact of bank deregulation on the distribution of income in the United States. From the 1970s through the 1990s, most states removed restrictions on intrastate branching, which intensified bank competition and improved bank performance. Exploiting the cross-state, cross-time variation in the timing of branch deregulation, we find that deregulation materially tightened the distribution of income by boosting incomes in the lower part of the income distribution while having little impact on incomes above the median. The results suggest that regulatory impediment to competition among banks during the 20th century were disproportionally harmful to lower income workers.
Original languageEnglish
Place of PublicationTilburg
PublisherMacroeconomics
Number of pages46
Volume2009-56
Publication statusPublished - 2009

Publication series

NameCentER Discussion Paper
Volume2009-56

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Deregulation
Distribution of income
Income
Bank competition
Time variation
Bank performance
Low income
Impediments
Income distribution
20th century
Median
Workers
Boosting

Keywords

  • Financial Institutions
  • Government Policy and Regulation
  • Income Inequality

Cite this

Beck, T. H. L., Levine, R., & Levkov, A. (2009). Big Bad Banks? The Winners and Losers From Bank Deregulation in the United States. (CentER Discussion Paper; Vol. 2009-56). Tilburg: Macroeconomics.
Beck, T.H.L. ; Levine, R. ; Levkov, A. / Big Bad Banks? The Winners and Losers From Bank Deregulation in the United States. Tilburg : Macroeconomics, 2009. (CentER Discussion Paper).
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Beck, THL, Levine, R & Levkov, A 2009 'Big Bad Banks? The Winners and Losers From Bank Deregulation in the United States' CentER Discussion Paper, vol. 2009-56, Macroeconomics, Tilburg.

Big Bad Banks? The Winners and Losers From Bank Deregulation in the United States. / Beck, T.H.L.; Levine, R.; Levkov, A.

Tilburg : Macroeconomics, 2009. (CentER Discussion Paper; Vol. 2009-56).

Research output: Working paperDiscussion paperOther research output

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AB - We assess the impact of bank deregulation on the distribution of income in the United States. From the 1970s through the 1990s, most states removed restrictions on intrastate branching, which intensified bank competition and improved bank performance. Exploiting the cross-state, cross-time variation in the timing of branch deregulation, we find that deregulation materially tightened the distribution of income by boosting incomes in the lower part of the income distribution while having little impact on incomes above the median. The results suggest that regulatory impediment to competition among banks during the 20th century were disproportionally harmful to lower income workers.

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Beck THL, Levine R, Levkov A. Big Bad Banks? The Winners and Losers From Bank Deregulation in the United States. Tilburg: Macroeconomics. 2009. (CentER Discussion Paper).