Using count data on the number of bank failures in US states during the 1960 to 2006 period, this paper endeavors to establish how far sources of economic risk (recessions, high interest rates, inflation) or differences in solvency and branching regulation can explain some of the fragility in...

Government forbearance, support, and bailouts of banks and other financial institutions deemed 'too big to fail' (TBTF) are widely recognized as encouraging large companies to take excessive risk, placing smaller ones at a competitive disadvantage and influencing banks in general to grow...