The Regional Distribution of Bank Closings in the United States from 1982 to 1988

The Bank Failure Rate, Economic Conditions and Banking Statutes in the U.S., 1970–2009

“…These variables include the percentage growth rate of real GDP (Y), which is adopted in order to reflect the overall performance of the economy. The stronger the performance of the economy, as reflected in this study by a higher value of Y, the better the performance of bank loan portfolios and, as a result, the lower the likelihood of bank failures (Amos 1992;). Next, the higher the cost of funds for banks (COST), the lower bank profitability and, over time, the greater the probability of bank failures (Bradley and Jansen 1986;Saltz 1994), ceteris paribus.…”

“…This eclectic study follows several earlier related studies (Amos 1992; Cargill and Garcia 1985;Cebula 1996;Saltz 1994;Wheelock and Wilson 2000;Cebula 2010) by including a number of economic/financial variables. These variables include the percentage growth rate of real GDP (Y), which is adopted in order to reflect the overall performance of the economy.…”

“…This study adopts an eclectic bank-failure model based to some extent on earlier related studies (Amos 1992; Benston and Kaufman 1997;Bradley and Jansen 1986;Cebula and Belton 1994;Chao and Cebula 1996;Gropp et al 2006;Saltz 1994;Wheelock and Wilson 2000;Cebula 2010). However, this study differs from previous studies in the following ways: (a) it runs through the year 2009 and, thus, is more current; (b) it accounts explicitly for the impacts not only of FDICIA (as in Cebula 1996Cebula , 1999Benston and Kaufman 1997), but also for the potential impacts of the RNIBA.…”

An empirical note on the impact of federal deposit insurance on bank failures in the U.S.

“…Based in principle upon arguments found in Amos [1992], Barth [1991], Loucks [1992, t994], and others, we argue that an empirical analysis of the causes of CB failures must at least account somehow for the impact of such factors as recession, CB lending rates, the cost of funds to CBs, and CB capital-to-asset ratios, as well as for federal deposit insurance coverage per se.…”

“…The potential impact of declining crude oil prices (or of declining employment in oil and natural gas extraction) on financial institution closings is suggested by Amos [1992], Barth [1991], and Loucks [1994]. Such variables do appear useful in explaining geographic differentials in institutional closings and in explaining savings and load closings over time.…”