Pub Date : 2022-05-12DOI: 10.18651/er/v107n2jacewitz
Stefan Jacewitz
Over the last four decades, the number of community banks in the United States has steadily declined, from 15,000 in 1984 to less than 5,000 in 2021. Although community banks still account for more than 91 percent of all banks today, they hold a much smaller share of total industry assets: in particular, their asset share declined from 38 percent in 1984 to less than 12 percent in 2021. This decline has raised questions about the continued viability of the community bank business model. Community banks play an outsized role in originating loans to small businesses, so a continued decline in their numbers and asset holdings could constrain entrepreneurs’ access to credit—and, accordingly, constrain growth in the overall economy. Understanding the source of this decline is thus important for both regulators and policymakers. One possible explanation for the declining number of community banks is that larger banks have outpaced them in terms of efficiency. Community banks, which have less than $300 million in assets on average, may be less able to benefit from the economies of scale enjoyed by larger banks. In particular, community banks may be less able to afford or adapt to new technologies (such as mobile banking) that make banking more efficient. Moreover, a string of landmark regulatory changes— including the Riegle-Neal Act of 1994, the Gramm-Leach-Bliley Act
{"title":"The Increasing Brick-and-Mortar Efficiency of Community Banks","authors":"Stefan Jacewitz","doi":"10.18651/er/v107n2jacewitz","DOIUrl":"https://doi.org/10.18651/er/v107n2jacewitz","url":null,"abstract":"Over the last four decades, the number of community banks in the United States has steadily declined, from 15,000 in 1984 to less than 5,000 in 2021. Although community banks still account for more than 91 percent of all banks today, they hold a much smaller share of total industry assets: in particular, their asset share declined from 38 percent in 1984 to less than 12 percent in 2021. This decline has raised questions about the continued viability of the community bank business model. Community banks play an outsized role in originating loans to small businesses, so a continued decline in their numbers and asset holdings could constrain entrepreneurs’ access to credit—and, accordingly, constrain growth in the overall economy. Understanding the source of this decline is thus important for both regulators and policymakers. One possible explanation for the declining number of community banks is that larger banks have outpaced them in terms of efficiency. Community banks, which have less than $300 million in assets on average, may be less able to benefit from the economies of scale enjoyed by larger banks. In particular, community banks may be less able to afford or adapt to new technologies (such as mobile banking) that make banking more efficient. Moreover, a string of landmark regulatory changes— including the Riegle-Neal Act of 1994, the Gramm-Leach-Bliley Act","PeriodicalId":51713,"journal":{"name":"Federal Reserve Bank of St Louis Review","volume":null,"pages":null},"PeriodicalIF":1.7,"publicationDate":"2022-05-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74198997","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-03-24DOI: 10.18651/er/v107n2howesvonendebecker
Cooper Howes, Alice von Ende-Becker
{"title":"Monetary Policy and Intangible Investment","authors":"Cooper Howes, Alice von Ende-Becker","doi":"10.18651/er/v107n2howesvonendebecker","DOIUrl":"https://doi.org/10.18651/er/v107n2howesvonendebecker","url":null,"abstract":"","PeriodicalId":51713,"journal":{"name":"Federal Reserve Bank of St Louis Review","volume":null,"pages":null},"PeriodicalIF":1.7,"publicationDate":"2022-03-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90596391","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
W. Blake Marsh is a senior economist at the Federal Reserve Bank of Kansas City. This article is on the bank’s website at www.KansasCityFed.org The COVID-19 pandemic heightened investor, regulatory, and supervisory concerns about the U.S. banking system’s ability to survive a downturn. Both businesses and consumers pulled back on economic activity at the start of the health crisis, leading firm revenue to decline sharply amid fears of rapidly accelerating job losses, business closures, and lower household incomes. As a result, expectations that businesses and consumers would be unable to continue servicing their debt obligations increased. Investors and bank supervisors began bracing for significant losses at banks, which could threaten the stability of the broader financial system. Policymakers moved quickly to backstop financial markets while supervisors tried to ensure banks could withstand the anticipated loan losses. In June 2020, the Board of Governors of the Federal Reserve System took steps to preserve capital at large banks by capping dividend payments to shareholders and prohibiting common stock repurchases outright for some time. In doing so, supervisors looked to prevent banks from repeating behaviors observed during the 2007–09 global financial crisis (GFC). During that crisis, banks continued to pay dividends to shareholders while suffering sizable losses. Ultimately, those losses left many banks teetering on the edge of failure, and a federal bailout was required to keep the system afloat.
W. Blake Marsh是堪萨斯城联邦储备银行的高级经济学家。2019冠状病毒病大流行加剧了投资者、监管机构和监管机构对美国银行体系在经济衰退中生存能力的担忧。在卫生危机开始时，企业和消费者都减少了经济活动，导致企业收入急剧下降，人们担心失业、企业倒闭和家庭收入下降会加速。因此，企业和消费者将无法继续偿还债务的预期增加了。投资者和银行监管者开始为银行的巨额亏损做准备，这可能会威胁到整个金融体系的稳定。政策制定者迅速采取行动支持金融市场，而监管机构则试图确保银行能够承受预期的贷款损失。2020年6月，美国联邦储备系统理事会(Board of Governors of Federal Reserve System)采取措施，限制向股东支付的股息，并在一段时间内禁止直接回购普通股，以保留大型银行的资本。在这样做的过程中，监管机构希望防止银行重蹈2007-09年全球金融危机(GFC)期间的覆辙。在那次危机中，银行在遭受巨大损失的同时继续向股东支付股息。最终，这些损失使许多银行在倒闭的边缘摇摇欲坠，联邦政府需要救助才能维持金融体系。
{"title":"How Did Banks and Investors Respond to the 2020 Stress Test Results?","authors":"By W. Blake Marsh","doi":"10.18651/er/v107n1marsh","DOIUrl":"https://doi.org/10.18651/er/v107n1marsh","url":null,"abstract":"W. Blake Marsh is a senior economist at the Federal Reserve Bank of Kansas City. This article is on the bank’s website at www.KansasCityFed.org The COVID-19 pandemic heightened investor, regulatory, and supervisory concerns about the U.S. banking system’s ability to survive a downturn. Both businesses and consumers pulled back on economic activity at the start of the health crisis, leading firm revenue to decline sharply amid fears of rapidly accelerating job losses, business closures, and lower household incomes. As a result, expectations that businesses and consumers would be unable to continue servicing their debt obligations increased. Investors and bank supervisors began bracing for significant losses at banks, which could threaten the stability of the broader financial system. Policymakers moved quickly to backstop financial markets while supervisors tried to ensure banks could withstand the anticipated loan losses. In June 2020, the Board of Governors of the Federal Reserve System took steps to preserve capital at large banks by capping dividend payments to shareholders and prohibiting common stock repurchases outright for some time. In doing so, supervisors looked to prevent banks from repeating behaviors observed during the 2007–09 global financial crisis (GFC). During that crisis, banks continued to pay dividends to shareholders while suffering sizable losses. Ultimately, those losses left many banks teetering on the edge of failure, and a federal bailout was required to keep the system afloat.","PeriodicalId":51713,"journal":{"name":"Federal Reserve Bank of St Louis Review","volume":null,"pages":null},"PeriodicalIF":1.7,"publicationDate":"2022-02-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72518191","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-12-17DOI: 10.18651/er/v107n1cowley
Cortney Cowley
{"title":"Long-Term Pressures and Prospects for the U.S. Cattle Industry","authors":"Cortney Cowley","doi":"10.18651/er/v107n1cowley","DOIUrl":"https://doi.org/10.18651/er/v107n1cowley","url":null,"abstract":"","PeriodicalId":51713,"journal":{"name":"Federal Reserve Bank of St Louis Review","volume":null,"pages":null},"PeriodicalIF":1.7,"publicationDate":"2021-12-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76050638","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-11-18DOI: 10.18651/er/v106n4browntousey
Jason S. Brown, Colton Tousey
{"title":"How the Pandemic Influenced Trends in Domestic Migration across U.S. Urban Areas","authors":"Jason S. Brown, Colton Tousey","doi":"10.18651/er/v106n4browntousey","DOIUrl":"https://doi.org/10.18651/er/v106n4browntousey","url":null,"abstract":"","PeriodicalId":51713,"journal":{"name":"Federal Reserve Bank of St Louis Review","volume":null,"pages":null},"PeriodicalIF":1.7,"publicationDate":"2021-11-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86200495","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Prepaid Cards: An Inadequate Solution for Digital Payments Inclusion","authors":"Ying Lei Toh","doi":"10.18651/er/v106n4toh","DOIUrl":"https://doi.org/10.18651/er/v106n4toh","url":null,"abstract":"","PeriodicalId":51713,"journal":{"name":"Federal Reserve Bank of St Louis Review","volume":null,"pages":null},"PeriodicalIF":1.7,"publicationDate":"2021-10-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79316970","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article documents the long-term relationship among juvenile conviction, occupation choices, employment, wages, and recidivism. Using data from NLSY97, we document that youths who are convicted at or before age 17 have lower full-time employment rate and lower wage growth rate even after 10 years into the labor market. Merging the NSLY97 with occupational characteristics data from O*NET, we show that youths with a juvenile conviction are less likely to be employed in occupations that have a higher on-the-job (OTJ) training requirement and these high OTJ occupations have higher wage and wage growth. The accumulated occupation-specific work experience, general experience, and education are important to explain the gaps in wage and recidivism between youths with and without a juvenile conviction. Our results highlight the important role of occupation choices as a human capital investment vehicle through which juvenile crimes have a long-term impact on wages and recidivism.
{"title":"The Impact of Juvenile Conviction on Human Capital and Labor Market Outcomes","authors":"Limor Golan, Rong Hai, Hayley Wabiszewski","doi":"10.20955/wp.2021.011","DOIUrl":"https://doi.org/10.20955/wp.2021.011","url":null,"abstract":"This article documents the long-term relationship among juvenile conviction, occupation choices, employment, wages, and recidivism. Using data from NLSY97, we document that youths who are convicted at or before age 17 have lower full-time employment rate and lower wage growth rate even after 10 years into the labor market. Merging the NSLY97 with occupational characteristics data from O*NET, we show that youths with a juvenile conviction are less likely to be employed in occupations that have a higher on-the-job (OTJ) training requirement and these high OTJ occupations have higher wage and wage growth. The accumulated occupation-specific work experience, general experience, and education are important to explain the gaps in wage and recidivism between youths with and without a juvenile conviction. Our results highlight the important role of occupation choices as a human capital investment vehicle through which juvenile crimes have a long-term impact on wages and recidivism.","PeriodicalId":51713,"journal":{"name":"Federal Reserve Bank of St Louis Review","volume":null,"pages":null},"PeriodicalIF":1.7,"publicationDate":"2021-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84113269","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Relative to rational expectations models, learning models provide a theory of expectation formation where agents use observed data and a learning rule. Given the possibility of multiple equilibria under rational expectations, the learning literature often uses stability as a criterion to select an equilibrium. This article uses a monetary economy to illustrate that equilibrium selection based on stability is sensitive to specifications of the learning rule. The stability criterion selects qualitatively different equilibria even when the differences in learning specifications are small.
{"title":"Stability and Equilibrium Selection in Learning Models: A Note of Caution","authors":"YiLi Chien, In-Koo Cho, B. Ravikumar","doi":"10.20955/r.103.477-88","DOIUrl":"https://doi.org/10.20955/r.103.477-88","url":null,"abstract":"Relative to rational expectations models, learning models provide a theory of expectation formation where agents use observed data and a learning rule. Given the possibility of multiple equilibria under rational expectations, the learning literature often uses stability as a criterion to select an equilibrium. This article uses a monetary economy to illustrate that equilibrium selection based on stability is sensitive to specifications of the learning rule. The stability criterion selects qualitatively different equilibria even when the differences in learning specifications are small.","PeriodicalId":51713,"journal":{"name":"Federal Reserve Bank of St Louis Review","volume":null,"pages":null},"PeriodicalIF":1.7,"publicationDate":"2021-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74057958","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-09-30DOI: 10.18651/er/v106n4nievonendebeckeryang
Jun Nie, Alice von Ende-Becker, Shu-Kuei X. Yang
5 Jun Nie is a senior economist, Shu-Kuei X. Yang is a data engineer, and Alice von Ende-Becker is a research associate at the Federal Reserve Bank of Kansas City. This article is on the bank’s website at www.KansasCityFed.org U.S. tariffs on imports from other countries rose significantly in 2018 and 2019, particularly on imports from China. The average tariff rate on imports from China increased by more than 15 percentage points from January 2018 to December 2019 and affected more than $350 billion of imported goods. Although higher tariffs may raise costs for both foreign and domestic firms, recent studies suggest most of the burden fell on U.S. businesses and consumers due to higher prices and fewer imports (Fajgelbaum and others 2020; Amiti, Redding, and Weinstein 2019, 2020). Tariffs do not affect all categories of goods evenly, nor do all households spend the same share of their income on tariff-affected goods. As a result, the ultimate effect of tariff increases on household spending may differ across households. However, measuring these effects is challenging, as it requires combining two distinct data sets that define goods categories differently. The Consumer Expenditure Survey administered by the Bureau of Labor Statistics provides detailed data on hundreds of household spending categories, but these categories generally do not match the descriptions of goods in trade data from the U.S.
聂军是高级经济学家，杨淑奎是数据工程师，爱丽丝·冯·恩德-贝克尔是堪萨斯城联邦储备银行的研究员。美国对其他国家的进口关税在2018年和2019年大幅上升，尤其是对来自中国的进口关税。2018年1月至2019年12月，美国从中国进口商品的平均关税税率提高了15个百分点以上，受影响的进口商品超过3500亿美元。尽管更高的关税可能会提高外国和国内公司的成本，但最近的研究表明，由于价格上涨和进口减少，大部分负担落在了美国企业和消费者身上(Fajgelbaum等人2020;Amiti, Redding, and Weinstein 2019, 2020)。关税对所有类别商品的影响并不均匀，也不是所有家庭在受关税影响的商品上花费的收入份额相同。因此，关税增加对家庭支出的最终影响可能因家庭而异。然而，衡量这些影响是具有挑战性的，因为它需要结合两个不同的数据集，以不同的方式定义商品类别。美国劳工统计局(Bureau of Labor Statistics)管理的消费者支出调查(Consumer Expenditure Survey)提供了数百个家庭支出类别的详细数据，但这些类别通常与美国贸易数据中对商品的描述不相符
{"title":"How Did the 2018–19 U.S. Tariff Hikes Influence Household Spending?","authors":"Jun Nie, Alice von Ende-Becker, Shu-Kuei X. Yang","doi":"10.18651/er/v106n4nievonendebeckeryang","DOIUrl":"https://doi.org/10.18651/er/v106n4nievonendebeckeryang","url":null,"abstract":"5 Jun Nie is a senior economist, Shu-Kuei X. Yang is a data engineer, and Alice von Ende-Becker is a research associate at the Federal Reserve Bank of Kansas City. This article is on the bank’s website at www.KansasCityFed.org U.S. tariffs on imports from other countries rose significantly in 2018 and 2019, particularly on imports from China. The average tariff rate on imports from China increased by more than 15 percentage points from January 2018 to December 2019 and affected more than $350 billion of imported goods. Although higher tariffs may raise costs for both foreign and domestic firms, recent studies suggest most of the burden fell on U.S. businesses and consumers due to higher prices and fewer imports (Fajgelbaum and others 2020; Amiti, Redding, and Weinstein 2019, 2020). Tariffs do not affect all categories of goods evenly, nor do all households spend the same share of their income on tariff-affected goods. As a result, the ultimate effect of tariff increases on household spending may differ across households. However, measuring these effects is challenging, as it requires combining two distinct data sets that define goods categories differently. The Consumer Expenditure Survey administered by the Bureau of Labor Statistics provides detailed data on hundreds of household spending categories, but these categories generally do not match the descriptions of goods in trade data from the U.S.","PeriodicalId":51713,"journal":{"name":"Federal Reserve Bank of St Louis Review","volume":null,"pages":null},"PeriodicalIF":1.7,"publicationDate":"2021-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83287592","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-09-02DOI: 10.18651/er/v106n3glovermustredelrio
Andrew Glover, José Mustre-del-Ŕıo
{"title":"What Happens When the Minimum Wage Rises? It Depends on Monetary Policy","authors":"Andrew Glover, José Mustre-del-Ŕıo","doi":"10.18651/er/v106n3glovermustredelrio","DOIUrl":"https://doi.org/10.18651/er/v106n3glovermustredelrio","url":null,"abstract":"","PeriodicalId":51713,"journal":{"name":"Federal Reserve Bank of St Louis Review","volume":null,"pages":null},"PeriodicalIF":1.7,"publicationDate":"2021-09-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76171254","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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