Deregulation and Structural Change in the U.S. Commercial Banking Industry

Regulatory change not seen since the Great Depression swept the U.S. banking industry beginning in the early 1980s and culminated with the Interstate Banking and Branching Efficiency Act of 1994. This paper describes and discusses the evolution of the U.S. banking industry over the past two decades, using the 1976 to 1998 Report of Condition and Income (Call Report) and merger data posted on the Federal Reserve Bank of Chicago web site. Among several results, more permissive interstate banking and branching regulation significantly associates with higher merger rates, with lower net entry rates, and with higher concentration within states.