Bank Insolvency Risk and the Market for Large Certificates of Deposit.

In this paper, the authors employ a new source of bank survey data to determine whe ther the market for large certificates of deposit exacts a price for bank risk taking. They find strong evidence that this is in fact the case. Proxy measures of the likelihood of bank insolvency, the variab ility of bank returns on assets, and bank capitalization are all foun d to influence jumbo CD rates in a manner consistent with this hypoth esis. Area-specific variables are also found to play an important rol e in explaining observed jumbo CD rates. Copyright 1988 by Ohio State University Press.

Recent trends in the number and size of bank branches: an examination of likely determinants

In this paper, we examine the role of market characteristics in explaining the much discussed phenomenon of growth in the number of banking institution branches over time, and the much less discussed phenomenon of decline in the size of the average branch. We note first that substitution of bank branches in the US for thrift branches accounts for much of the sharp rise observed for bank branches over time. Using a panel data set that consists of over 2,000 markets observed from 1988 to 2004, we report a number of findings regarding the market characteristics that are associated with the number of branches (of both commercial banks and savings associations) in a market and the average employment size of those branches.Branch banks ; Banks and banking - United States