صنعت بانکداری پس از قانون ریگلی-نیل: تجدیدساختار و عملکرد کلی

The passage of the Riegle–Neal Interstate Banking and Branching Efficiency Act (IBBEA) of 1994 allowed bank holding companies to acquire banks in any state after September 30, 1995. We examine the impact of the legislation on the performance of the banking industry by comparing performance measures of banks with their pre-IBBEA levels. We find that the performance improved in the post-IBBEA period but when controlled for general economic conditions and interest rate movements, the impact of IBBEA on bank performance appears insignificant.

The passage of the Riegle–Neal Interstate Banking and Branching Efficiency Act (IBBEA) in 1994 was a watershed event in the history of the banking industry. The IBBEA permitted bank holding companies to acquire banks in any state after September 30, 1995. It also invalidated the laws of states that allowed interstate banking only on a regional or reciprocal basis. In lifting the restrictions placed on the banking industry for decades by earlier legislations, the IBBEA gave banks a reasonably free hand to restructure and reorganize to achieve greater efficiency and profitability. The passage of the IBBEA led to significant gains for the banking industry. Brook, Hendershott, and Lee (1998) examined the benefits of takeover deregulation and found that $85 billion in value was created in the banking industry. Carrow and Heron (1998) report that the IBBEA’s passage had a positive wealth effect on a sample of large bank holding companies. After discussing the benefits of lower barriers to geographic expansion, Carrow and Heron (1998) state, “Clearly more time will need to pass before researchers gain access to the time-series of the pre- and post-IBBEA data required to empirically quantify and distinguish among the hypothesized sources of benefits indicated above.” Enough time has now passed to allow an early look at structure and performance changes resulting from passage of the IBBEA. Several studies in the banking literature suggest the potential benefits of reorganization to the industry. Hunter, Timme, and Yang (1990) report about increased scale economies. Jayaratne and Strahan (1997) report that banks’ loan losses and operating costs fell sharply following the state initiatives in which individual stares removed barriers to interstate branching between 1978 and 1992 and that these costs were largely passed along to bank borrowers in the form of lower loan rates. They also suggest that these efficiency gains arose because better performing banks were able to expand their market share once geographic restraints were eased. Calomiris (1999) suggests that bank consolidation waves produce substantial efficiency gains associated with reduced operating costs, enhanced diversification, and enrichment of bank-customer relationships. Based on the above studies, we test the following hypothesis in this study: “The number of banks declined and bank performance significantly improved following implementation of the IBBEA.” We investigate the impact of the IBBEA on the structure and performance of the banking industry by comparing the bank performance in pre- and post-TBBEA periods. We report that there are significantly fewer but bigger banks after the passage of the IBBEA and that the average performance of all banks improved in the post-Riegle–Neal period. However, our findings indicate that the improvement is primarily explained by variables associated with general economic conditions and interest rates and only minimally explained by the variable associated with implementation of the Act. The rest of the paper is organized as follows: a description of the data set for the study in Section 2, the methodology and results in Section 3, followed by the conclusion in Section 4.

The Riegle–Neal Interstate Banking and Branching Efficiency Act of I994 permitted bank holding companies to acquire banks in other states as of September 30, 1995. The impact of the IBBEA on the number of banks and their performance was investigated for this paper. The results suggest that following the enactment of the IBBEA there are fewer, larger, and better performing banks in the industry. While a relationship between bank consolidation and performance was theorized, macroeconomic variables such as the RGDP and PRIME impacted bank performance more than the enactment of the IBBEA. The study has a few limitations. First, some of the IBBEA provisions came into affect only after June 1997. However, since bank holding companies could acquire banks in other states starting in September 1995, the consolidation in the industry began at that time. Future studies in the area may analyze the impact of the act further with larger and more precise data sets. The purpose of this study was only to assess and record the preliminary results from the post-IBBEA period.