exogenous removal of marketplace investing restrictions by US states, we show the cost of bank deposits increases by … approximately 2.26%. The effects are attributable to deregulation provoking more intense deposit competition that reduces deposit …

We examine the effects of competition on bank risk. We find strong evidence that interstate banking deregulation … — which generally increases bank competition — is associated with lower bank risk and some evidence intrastate branching … increases bank risk. Further, interstate banking reduces bank risk more in sparsely populated states. Additional analyses …

, will depend on the extent to which competition in banking is based on fixed or variable costs. If competition focuses on … by the deregulation process. Alternatively, when competition focuses on expenses unrelated to the level of intermediation … competition in fixed costs such as brand image or electronic banking. I propose a simple test using aggregate data to provide an …