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U.S. banking concentration, 1820–2019

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  • Fohlin, Caroline
  • Jaremski, Matthew

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.

Suggested Citation

  • Fohlin, Caroline & Jaremski, Matthew, 2020. "U.S. banking concentration, 1820–2019," Economics Letters, Elsevier, vol. 190(C).
    • Handle: RePEc:eee:ecolet:v:190:y:2020:i:c:s0165176520300926
    DOI: 10.1016/j.econlet.2020.109104
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    References listed on IDEAS

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    Cited by:

    1. Bitros, George C., 2021. "Destabilizing asymmetries in central banking: With some enlightenment from money in classical Athens," The Journal of Economic Asymmetries, Elsevier, vol. 23(C).

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    More about this item

    Keywords

    Bank concentration; Too big to fail;

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • N11 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: Pre-1913

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