This paper tests whether there is a preference by borrowers and lenders of a particular ethnic or racial group that may predispose them to borrow and lend from each other. Using a narrow geographic area called zip code clusters, this paper groups minority-owned and non-minority-owned banks to...

In 1984, the Comptroller of the Currency stated that the eleven largest banking firms were quot;too big to fail,quot; implying they would receive de facto 100 percent deposit insurance. The question is whether this announcement altered the market's perception of the riskiness of all banking...