Integration Among US Banks

51 Pages Posted: 27 Sep 2019 Last revised: 29 Sep 2020

See all articles by Abhinav Anand

Abhinav Anand

IIM Bangalore

John Cotter

University College Dublin; University of California, Los Angeles (UCLA) - Anderson School of Management

Multiple version iconThere are 3 versions of this paper

Date Written: September 17, 2020

Abstract

We define and construct 'integration' for a large sample of 2287 US banks-measured by their level of exposure to common factors-during the period 1993-2019. Integration among US banks shows a steady increase and displays significantly high peaks during episodes of market distress such as the LTCM collapse, the Dotcom bust, the Great Recession and the Eurozone crisis. Regulatory intervention has improved US banks' capitalization, but it has not curtailed banks' exposure to common factors, which continues to rise unabated. Among characteristics associated with integration, we find that bank size is the most significant-both economically and statistically.

Keywords: Bank integration, Bank size, Banking crises, Systemically important banks, Bank risk, Principal component regressions

JEL Classification: G10, G21, G28, C32, C33, C38, C58

Suggested Citation

Anand, Abhinav and Cotter, John, Integration Among US Banks (September 17, 2020). IIM Bangalore Research Paper No. 597/2019, Available at SSRN: https://ssrn.com/abstract=3460375 or http://dx.doi.org/10.2139/ssrn.3460375

Abhinav Anand (Contact Author)

IIM Bangalore ( email )

Bannerghatta Road
Bangalore, 560 076
India

John Cotter

University College Dublin ( email )

School of Business, Carysfort Avenue
Blackrock, Co. Dublin
Ireland
353 1 716 8900 (Phone)
353 1 283 5482 (Fax)

HOME PAGE: http://https://johncotter.org/

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

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