Recent banking problems have prompted a variety of proposals for reforming deposit insurance and the banking system. Nearly all of these proposals, however, suffer from a common flaw - they would fail to create a banking system that is both stable and free to respond to market forces and...

We test whether rural versus urban location, and the amount of social capital present in those locations, influence the performance of Small Business Administration (SBA) 7(a) loans originated between 1984 and 2012. On average, we find that rural loans are about 11% less likely to default than...