Legislative and regulatory actions taken in response to the financial turmoil that occurred between 2007-2009 expanded the extent to which financial institution liabilities were protected by federal government guarantees, i.e., these actions expanded the federal financial safety net. How large...

The U.S. financial system has changed significantly over the last several decades without any major structural changes to the decentralized financial regulatory system, despite numerous proposals. In the past decade, many countries have chosen to consolidate their regulators into a newly formed...

During recent decades banking markets have changed considerably. Nevertheless, banking antitrust analysis continues to follow the same basic philosophy laid down 40 years ago by the Supreme Court. Does the change in banking markets imply the need to alter antitrust analysis in banking? This...

The U.S. financial system has changed significantly over the last several decades without any major structural changes to the decentralized financial regulatory system, despite numerous proposals. In the past decade, many countries have chosen to consolidate their regulators into a newly formed...

The banking industry of the 1950s, 1960s, and 1970s is often described as operating according to a 3-6-3 rule: Bankers gathered deposits at 3 percent, lent them at 6 percent, and were on the golf course by 3 o'clock in the afternoon. The implication was that the banking industry was less...

Market forces and regulatory changes have produced an evolution of the credit union industry so that many credit unions now compete more directly with banks than in the past. Because credit unions are tax-exempt, while in general banks are not, observers note that credit unions may have an...

Contagion-induced bank runs are widely viewed as the cause of widespread bank failures during the Great Depression. Federal deposit insurance was created in 1934 to prevent future contagion-generated bank failures. Yet the cycle of bank failures appears quite similar to an industrial shakeout, a...

To minimize their losses, creditors of insolvent nonbank firms have every incentive to force prompt closure, thereby ensuring that assets of such firms are redirected to more valuable uses. For banks and savings institutions, however, deposit insurance blunts the incentive by removing...

Banking/commerce combinations, whereby a banking firm conducts commercial activities such as manufacturing, have long been prohibited in the United States. The traditional concerns with such combinations -- conflicts of interest and the spread of monopoly power -- are not compelling in today's...

In 1977, Congress passed the Community Reinvestment Act (CRA) to encourage expanded lending and investment in lower income communities. In accordance with the Act, federal bank regulators periodically evaluate banks' lending performance in such communities, providing both carrot and stick to...