Deregulation, the Internet, and the competitive viability of large banks and community banks

Deregulation, technological change, and increased competitive rivalry are transforming U.S. commercial banking from an industry dominated by thousands of small, locally focused banks into an industry where a handful of large banks could potentially span the nation and control the majority of its bank deposits. This paper examines the comparative strengths and weaknesses of large and small banks in this new environment, and outlines the strategic opportunities and threats that new technology - especially the Internet - pose for U.S. banks. We begin by documenting recent trends in bank size, industry structure, competitive conditions, and bank product mix. We argue that these trends are consistent with a simple competitive strategy framework in which commercial banks choose between two profitable business strategies: (a) a community bank business model in which banks have a local focus, a high cost structure, and sell low volumes of personalized service at high margins, and (b) a global bank business model in which banks have a national or international focus, a low cost structure, and sell high volumes of standardized financial products at low margins. Finally, we discuss how Internet banking is likely to affect this strategic equilibrium. In particular, we analyze how a shift away from brick and mortar branches and toward the Internet delivery channel will reduce the switching costs that currently dissuade retail deposit customers from changing banks. Based on the foregoing analysis, we conclude that the number of small banks will continue to decline in the future - not because the community bank business model is flawed, but because most of the small banks that use this model are poorly run. In the long-run, our analysis suggests that well-run community banks should be able to adapt their business practices to technological change and profitably co-exist with large, globally focussed banks.Banks and banking ; Financial institutions

Montane lakes (lagoons) of the New England Tablelands Bioregion

The vegetation of montane lagoons of the New England Tablelands Bioregion, New South Wales is examined using flexible UPGMA analysis of frequency scores on all vascular plant taxa, charophytes and one liverworts. Seven communities are described: 1. Hydrocotyle tripartita – Isotoma fluviatilis – Ranunculus inundatus – Lilaeopsis polyantha herbfield; 2. Eleocharis sphacelata – Potamogeton tricarinatus sedgeland; 3. Eleocharis sphacelata – Utricularia australis – Isolepis fluitans, herbfield; 4. Utricularia australis – Nitella sonderi herbfield; 5. Eleocharis sphacelata – Utricularia australis – Ricciocarpus natans sedgeland; 6. Carex gaudichaudiana – Holcus lanatus – Stellaria angustifolia sedgeland; 7. Cyperus sphaeroides – Eleocharis gracilis – Schoenus apogon – Carex gaudichaudiana sedgeland. 58 lagoons were located and identified, only 28% of which are considered to be intact and in good condition. Two threatened species (Aldovandra vesiculosa and Arthaxon hispidus) and three RoTAP-listed taxa were encountered during the survey

Current thinking about global trade policy – Robert Wade’s frustration at UNCTAD

Following a recent United Nations conference, Robert Wade voices his frustration at the failure of international trade economists to see beyond their own bubble