Has Dodd-Frank Affected Bank Expenses?

Journal of Regulatory Economics, Forthcoming

45 Pages Posted: 3 Sep 2016 Last revised: 24 Mar 2019

See all articles by Thomas L. Hogan

Thomas L. Hogan

Rice University - Baker Institute for Public Policy

Scott Burns

Ursinus College; American Institute for Economic Research

Date Written: March 14, 2019

Abstract

This paper examines the potential effects of the Dodd-Frank Act of 2010 on banks’ noninterest expenses. Using data on U.S. bank holding companies from 1995 through 2016, we test whether noninterest expenses increase following the passage of the Dodd-Frank Act or in relation to the number of banking regulations implemented after Dodd-Frank. We analyze subsamples of banks above and below $10 billion in total assets and consider total noninterest expenses, salaries, non-salary expenses, and specific subcategories of non-salary expenses: legal, consulting, auditing, and data processing. Non-salary expenses for both large and small banks show a one-time increase after Dodd-Frank, while salary expenses tend to increase with regulations. The results indicate that total noninterest expenses for the banking system are higher on average by more than $50 billion per year compared to before the Dodd-Frank Act.

Keywords: Bank Expenses, Regulation, Federal Reserve, Dodd-Frank, Financial crisis

JEL Classification: E58, G21, G28

Suggested Citation

Hogan, Thomas L. and Burns, Scott, Has Dodd-Frank Affected Bank Expenses? (March 14, 2019). Journal of Regulatory Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2832288 or http://dx.doi.org/10.2139/ssrn.2832288

Thomas L. Hogan (Contact Author)

Rice University - Baker Institute for Public Policy ( email )

6100 Main Street, MS-40
Houston, TX 77005
United States

Scott Burns

Ursinus College ( email )

Collegeville, PA 19426-2562
United States
2259371098 (Phone)
2259371098 (Fax)

HOME PAGE: http://www.scottburnsecon.com

American Institute for Economic Research

PO Box 1000
Great Barrington, MA 01230
United States

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