Dale S. Drum

English

Research Papers in Economics

  ld n     p n   ff l  t  n  nd    l 
   n       n b n  n 
  l  S.  r  
     ff l  t  n   th   h ld n     p n 
 ff  t  th     t  tr  t r   f b n   h   b  n  
  ntr v r   l   bj  t  n b n  n  f r     
t   . In   pp rt  f th  r  ppl   t  n  t     
   r  b n  , h ld n     p n     r    th t
   n       n th   p r t  n  f b n     n b 
  h  v d thr   h  ff l  t  n. If th     pp r 
t n t    f r    n      d   x  t  nd  f th   
   n       r  p    d  n t  th  p bl  , th n  t
    b   r   d th t th  r   lt n  p bl  
b n f t    n b  pr     d t   ff  t,  n p rt  r
p rh p   n  h l ,  n   nt    p t t v   ff  t 
pr   nt  n th   ppl   t  n.
Wh l  h ld n     p n   ppl   nt   nd
th  r  dv   t     t     l     n          n
 r    nt f r        t  n , th     ld     p 
p rt th  r p   t  n   th   n r t  d t . On th 
 th r h nd,  pp n nt  r r l    pp rt th  r
v       th r. E p r   l  t d     x   n n  th  
       l   h v  r   h d   x d   n l    n .
A  t d   f 208 S v nth    tr  t b n      
 nd rt   n t   xpl r  th    p  t  f  ff l   
t  n  n th     t  tr  t r   f b n  .  h   
b n   r n  d fr   $6   ll  n t  $6 0   ll  n
 n     t   z .  h   ff  t  f br n h n   n th   f 
f    n    f th    b n        l    x   n d.
    lt   f th  St d .  h  r   lt   f th 
 t d   nd   t  th t  nd p nd nt b n  —
b n   n t  ff l  t d   th   th r    n  b n   r
    lt b n  h ld n     p n — r    bj  t t 
 t l   t   d r t     n       f    l .  h t   ,
th  p r  nt     n r      n t t l    t    l   
th n th  p r  nt     n r      n   tp t    r
 O E: A   p   f th    r  t  hn   l   r  n  p p r
 nt tl d " h  Eff  t  f   ld n  C  p n  Aff l  t  n
Up n th  S  l  E  n       f   n  ,"      r h   p r   .
   2,     v  l bl  fr   th    bl   Inf r  t  n C nt r,
  d r l     rv    n   f Ch     .
 A    pl   d  n th    t d ,   tp t      t   t d   
l  n r v n   pl   r v n   fr       r t    pl    n    
fr    th r    r   .  h   b n    tp t    v    d    th 
v l    f  r d t  xt nd d pl   th  v l    f  th r   rv    
p rf r  d b  th  b n .   t l    t    d f n d    t t l
 p r t n     t l     ll   rv     h r    r    v d b  th 
b n .
 nd p nd nt b n  ,  n  n r      n   tp t  f
 0 p r  nt  n r      t t l    t  b  t  .  p r 
  nt. S n      t r       r   l  l  th n   tp t,
p r  n t    t d  l n  .
  n    n SMSA  t p   ll   n  r  l  htl 
h  h r    t  th n d     p r bl  n n SMSA
b n  . C  p t t v  pr    r       f r  
SMSA b n   t   n      n   r   dv rt   n   r
t   ff r    p r bl    rv       th r fr    r  t
r d   d pr    .    h r    t    n  l   b 
       t d   th  n  rb n  nv r n  nt   , f r
 x  pl , h  h r t x    r r  l   t t  pr    .
In  dd t  n, b n     th br n h    pp  r
t  h v   l  htl  h  h r    t  th n b n  
  th  t br n h  .  h      t d ff r n   d   
n t b      p rt   l rl     n f   nt, h   v r,
 nt l th  b n  h    t l   t thr   br n h  .
Ov r ll,  ff l  t  n   th    n  b n 
h ld n     p n  h   n     n f   nt  ff  t  n
   l     n     . In f  t,  n    t      , th 
 n  b n  h ld n     p n      n
 r  n z t  n l  h ll th t   r l  tr n f r 
  n r h p  f th  b n  fr    nd v d  l  t   
  rp r t  n. Op r t n   ff    n      pr b bl 
n t  ff  t d b  th    h n    n th  f r   f
  n r h p,  lth   h  t      ff  t n t  n    
d   t  th  d ff r n    n th  t x  t t      
  rd d     rp r t   nt t .
M lt b n   ff l  t  ,  n th   th r h nd,
 r   l  htl  l     ff    nt th n b n   n t  f 
f l  t d   th h ld n     p n   . Alth   h  f
  r  n l  t t  t   l    n f   n  ,    0 p r  nt
 n r      n th    tp t  f th     ff l  t  b n  
 n r      t t l    t  b  t  .  p r  nt.  h r 
      t  b  n    p r   l j  t f   t  n, th n,
f r th      rt  n th t  ff l  t  n   th     l 
t b n  h ld n     p n    ll pr d       l 
   n      n t  th r      v  l bl  t   n 
d p nd nt b n  .
Oth r f nd n  . Add t  n l  nf r  t  n
  n b   l  n d b   r  p n  th  b n    nt 
d ff r nt   z   l     . S  l     n       h  
 p pr d   n ntl   n   d     nd   d    
  d r l     rv    n   f Ch     	 2 l r   b n  .   n   h v n      t  fr   $ 0
  ll  n t  $ 00   ll  n  r    n  d r d
  d      z d,  h l  b n     th     t  fr  
$ 00   ll  n t  $200   ll  n  r    n  d r d
  d    l r  .
  r   d      z d  nd p nd nt b n  ,  
 0 p r  nt  n r      n   tp t   ll  n r    
t t l    t  ppr x   t l  8.8 p r  nt. A     l r
 n r      n   tp t f r     d    l r  
 nd p nd nt b n   n r      t t l    t  
p r  nt.
 r n h n   ff  t    d    l r    nd
l r   b n     r  th n th   th r  r  p . In
b th  r  p , b n     th br n h    n  r
 l  htl  h  h r    t  th n    p r bl  b n  
  th  t br n h  .
Aff l  t  n   th    n  b n  h ld n      
p n  h     n  l   bl    p  t  n th     l 
   n       f  ll b t   d      z d b n  .
 h     ff l  t    r       h t   r   ff    nt
th n  nd p nd nt b n    f th         z ,
  th    0 p r  nt  n r      n   tp t  n 
 r    n  t t l    t  nl  8.  p r  nt.  h       
p r   t   n 8.8 p r  nt  n r      n t t l    t
f r   d      z d  nd p nd nt b n  .
Aff l  t  n   th     lt b n  h ld n      
p n  t nd  t  r d    th   ff    n    f  ll
b n    x  pt   d     nd   d    l r  
b n  .  h    b n    h r  th          l 
   n         th  r  nd p nd nt    nt rp rt 
 f th         z .
  l      pl   t  n .  h    n    ld n 
C  p n  A t pr v d   th     rd  f G v r 
n r   f th    d r l     rv  S  t     th
   d l n   f r  v l  t n   ppl   t  n  t     
t bl  h   h ld n     p n   r t       r   
b n   n th        f  n  x  t n  h ld n      
p n . On   f th  pr n  p l   n  rn   f th    t
   th  pr b bl   ff  t    h   h ld n     p n 
  ll h v   p n    p t t  n  n th  r l v nt
  r  t. An  ppl   t  n th t,  f  ppr v d,
   ld r   lt  n  dv r      p t t v   ff  t 
  ll b  d n  d  nl    th r      v d n    f   f 
f    nt p bl   b n f t  t   l  rl    t    h th 
 nt    p t t v   ff  t .
In     n   t  d      n,  n   f th   r t r  
th     rd   n  d r      h th r  n        t  n
  ll r   lt  n    n   n  ff    n    h  h   ll
b n f t th  p bl  . S  t  n 4(  (8   f th  A t,
 h  h d  l    th th         t  n  f n nb n 
f r  , r    r   th     rd t    n  d r    n   n
 ff    n       n   f th  f  t r  th t    ld
p t nt  ll   ff  t  dv r    ff  t .       h
 p   f   r    r   nt  x  t   n    t  n  ,
h   v r,  h  h  ppl    t  b n         t  n .
    th r   th th    nv n  n    nd
n  d   f th       n t , th     rd   
 bl   t d t    n  d r th  f n n   l  nd
  n   r  l r    r     nd f t r  pr  p  t   f
th     p n . S n   th      ll b   ff  t d  f
   n       r  r  l z d, th     rv      th 
 pr n b  rd  ll   n  th     rd t    n  d r
   n   n  ff    n          p r t  f  t r  n
       n   h th r th  p bl   b n f t    ll   t 
    h th   nt    p t t v   ff  t   f   b n 
       t  n.
G  n   n  ff    n   r   lt n   n r d   d
pr      r b tt r   rv     r   dd t  n l b n f t 
f ll n    th n th     p t t v   r   nv n  n  
 nd n  d   r t r  . G  n   n  ff    n   d  n t
h v  t  b  p    d  n t     t   r  b t   n
 n t  d b  h ld    h  h r r t  n d   rn n  ,
th r b    pr v n  th    p t l z t  n  f th 
     r d b n .  h  r   lt n   n r      n
f n n   l  tr n th  nd    ndn     f th  b n 
   ld b    f  t r     h n  f v r bl  f r  p 
pr v l  f th   ppl   t  n.
C n l    n.  h  r   lt   f th    t d   n 
d   t  th t b n    ff l  t d   th h ld n      
p n    d  n t   h  v     n       f    l 
b   nd th     v  l bl  t   nd p nd nt b n  
 f th         z .  h r f r ,   n  d r n 
   n       f    l       f  t r th t   n b 
r l  d  p n t    t    h th   nt    p t t v 
 ff  t   f   pr p   d        t  n h   l ttl 
  r t.  h   r    nt    pl  l     f r     
p r   l   pp rt.
Aff l  t  n d         t  h v    p   t v 
 ff  t  n    l     n       n th        f
  d      z d b n    ff l  t d   th  n  b n 
h ld n     p n   . C  p t t v        ,
h   v r,  r    ld        n f   nt f  t r  n
th         .  h    r    r    p rt nt  n
 ppl   t  n   f   lt b n  h ld n      
p n   ,  h r   ff l  t  n  pp  r  d tr   nt l
t     l     n       f  ff l  t d b n  . Onl 
   n    d     nd   d    l r   b n   d 
 ff l  t    f   lt b n  h ld n     p n   
  n     v n t    t h th     l     n     
 f  nd p nd nt b n  .
22	 E  n       r p  t v  

Holding company affiliation and scale economies in banking

http://www.chicagofed.org/digital_assets/publications/economic_perspectives/1979/ep_mar_apr1979_part4_drum.pdf

Holding company affiliation and scale economies in banking

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Research Papers in Economics