Diversification of geographic risk in retail bank networks: evidence from bank expansion after the Riegle‐Neal Act
研究了1994年Riegle-Neal法案如何影响美国银行的地理风险分散，发现该法案扩大了小州的风险分散机会，但只有大银行充分利用了这些机会。
The 1994 Riegle‐Neal Act (RN) removed restrictions on branch‐network expansion for banks in the United States. An important motivation was to facilitate geographic risk diversification (GRD). Using a factor model to measure banks' geographic risk, we show that RN expanded GRD possibilities in small states, but only some large banks took advantage. Using our measure of geographic risk and an empirical model of branch‐network choice, we identify preferences toward GRD separately from other factors possibly limiting network expansion. Counterfactuals show that risk negatively affected bank value but was counterbalanced by economies of density/scale, reallocation/merging costs, and local market power concerns.