Our research as well as that by other authors has found scale economies at all sizes of banks and the largest scale economies at the largest banks – that is, larger banks are able to provide products at lower average cost than smaller banks. While the earlier literature found that scale...

The unique capital structure of commercial banking - funding production with demandable debt that participates in the economyś payments system - affects various aspects of banking. It shapes banks ́comparative advantage in providing financial products and services to informationally opaque...

In the wake of the financial crisis that began in 2007, policy makers have focused again on the largest financial firms to consider the association of their size with systemic risk. An equally important question examines whether their size benefits the economy. In particular, is the size of our...