Nationwide branching and its impact on market structure, quality, and bank performance

The paper examines the effects of the Riegle-Neal branching deregulation in the 1990s on banking market structure, service, and performance. While concentration at the regional level has increased, deregulation has left almost intact the structure of metropolitan markets, which have between two and three dominant banks - controlling over half of market deposits - both at the beginning and the end of the sample. A significant portion of the observed increase in branch networks can be traced to the deregulation, allowing consumers to enjoy larger fee-free networks locally and regionally. Costs, service fees, and credit risk increase, spreads fall, and profits are unaffected.