Skip Navigation


Journal of Competition Law and Economics Advance Access originally published online on March 16, 2007
Journal of Competition Law and Economics 2007 3(1):127-148; doi:10.1093/joclec/nhm001
This Article
Right arrow Full Text
Right arrow Full Text (PDF)
Right arrow All Versions of this Article:
3/1/127    most recent
nhm001v1
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Similar articles in this journal
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Laderman, E. S.
Right arrow Articles by Pilloff, S. J.
Right arrow Search for Related Content
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

© The Author (2007). Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

USING COUNTY-BASED MARKETS TO SUPPORT AND FEDERAL RESERVE MARKETS TO IMPLEMENT BANK MERGER POLICY

Elizabeth S. Laderman* and Steven J. Pilloff**

Correspondence: * Economist, Federal Reserve Bank of San Francisco. E-mail: elizabeth.laderman{at}sf.frb.org

Correspondence: ** Associate Professor of Management, Hood College. E-mail: pilloff{at}hood.edu. We are grateful to Shaista Ahmed and Chishen Wei for valuable research assistance. Helpful comments were provided by Dean Amel, Eli Brewer, Andrew Cohen, Robert DeYoung, Ron Feldman, Alton Gilbert, Tim Hannan, Robin Prager, and attendees of the 2003 conference of the Federal Reserve System Committee for Financial Structure and Regulation. The views expressed in this paper are the authors' and do not necessarily reflect those of the Federal Reserve Bank of San Francisco or the Board of Governors of the Federal Reserve System.

In this paper, we consider three issues raised by the apparent inconsistency between the current research practice of using county-based markets (Metropolitan Statistical Areas (MSAs) and non-MSA counties) to investigate the validity of the theoretical underpinnings of bank merger policy and the current regulatory practice of using Federal Reserve (FR) banking markets, which often do not follow county lines, to implement that policy. Using a national sample of bank and thrift branch deposit data, we find that county-based areas cannot simply substitute for FR markets in the implementation of bank merger policy. For example, numerous potential mergers would raise competitive issues in county-based areas, but not in FR markets, and vice versa. We also conclude that, because of the relative difficulty of assembling demographic data for non-county-based areas, it is impractical to consistently use FR markets in bank merger policy research. However, we do find that, despite the inconsistencies between the two types of markets, analysis that uses county-based areas is relevant for bank merger policy that is implemented with FR markets. For example, we find that profitability regression results using variables based on FR markets are similar to those found using variables based on MSAs and non-MSA counties.


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?




Disclaimer: Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.