This paper examines how the production of payment services impacts the franchise value of banks. It also explores whether analysis are incorrectly measuring the performance of the banking sector and failing to realize the full importance of payments-driven revenues to banks. In initial empirical...

We examine whether “imputed” interest rates obtained from bank financial statements are unbiased estimates of “offered” interest rates that the same banks report in surveys. We find evidence of a statistically significant amount of bias. However, the statistical bias that we document...

We examine whether “imputed” interest rates obtained from bank financial statements are unbiased estimates of “offered” interest rates that the same banks report in surveys. We find evidence of a statistically significant amount of bias. However, the statistical bias that we document...

U.S. banking regulation has historically prohibited the ability of a bank to open or own a branch located outside of its home state, commonly referred to as interstate branching. Only since the passage of the Riegle-Neal Interstate Banking and Branching Efficiency Act (IBBEA) in 1994 have banks...

The Chicago Fed's 42nd Annual Conference on Bank Structure and Competition, which took place May 17–19, 2006, included a panel on federal preemption of state banking regulation. The panelists discussed the wide-ranging impact of rules issued by the Office of the Comptroller of the Currency,...

While the U.S. continues to transition away from cash toward electronic payment methods, some population segments continue to rely heavily on cash. In this study of foreign-born Latin Americans in Chicago, the authors find that the dramatic increase in the number of immigrants is supporting a...

In the second of two articles, the authors show that the business strategy chosen by a commercial banking company can have a substantial impact on its risk-return profile. Their analysis suggests that a wide variety of business strategies are likely to be financially viable in the future but,...

In the first of two articles in this issue, the authors document the increasing importance of noninterest income at U.S. commercial banking companies and address two fundamental misunderstandings regarding this trend: the belief that fee-based activities provide more stable earnings than...

This paper estimates the volume of payments-driven revenues at the top 40 domestic BHCs and builds on the statistical summaries that Radecki (1999) compiles from the top 25 BHCs in 1996. We replicate Radecki's 1996 results, but find that they overstate payments-driven revenues by including...