Two Centuries of U.S. Banking Concentration: 1820-2019

13 Pages Posted: 25 Mar 2020

See all articles by Caroline Fohlin

Caroline Fohlin

Emory University; Centre for Economic Policy Research (CEPR)

Matthew Jaremski

Utah State University - Huntsman School of Business; National Bureau of Economic Research (NBER)

Date Written: March 2020

Abstract

Concentration plays a key role in banking efficiency and stability, yet the literature lacks any long-run analysis of U.S. banking industry structure. This paper uses newly-collected archival data to provide the first study of banking concentration from the early years of the republic through 2019. While concentration was declining or stable before the mid-1920s, statistical tests identify a structural break thereafter, as concentration started steadily rising as a result of growth at the nation's largest five banks, particularly those located in New York City. A second structural break in the mid-1990s further accelerated the upward trend in concentration before slowing down during the Great Recession.

Keywords: bank concentration, Too Big To Fail

JEL Classification: E44, G20, N11

Suggested Citation

Fohlin, Caroline and Jaremski, Matthew, Two Centuries of U.S. Banking Concentration: 1820-2019 (March 2020). CEPR Discussion Paper No. DP14516, Available at SSRN: https://ssrn.com/abstract=3560324

Caroline Fohlin (Contact Author)

Emory University ( email )

Dept. of Economics
Atlanta, GA Georgia 30322
United States
4047276363 (Phone)

HOME PAGE: http://https://scholar.google.com/citations?user=Ma08bxEAAAAJ&hl=en

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Matthew Jaremski

Utah State University - Huntsman School of Business ( email )

3500 Old Main Hill
Logan, UT 84322-3500
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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