GEOGRAPHIC DEREGULATION OF THE U.S. BANKING INDUSTRY AND SPATIAL TRANSFERS OF CORPORATE CONTROL

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Abstract
High interest rates, technology, and the emergence of global capital markets have produced significant changes in the competitive market for financial services. Commercial banks, faced with increased competition from other financial service institutions, began to push for product and geographic deregulation in the early 1980s. Geographic deregulation has made it possible for bank holding companies to acquire banks in other states. The proportion of U.S. commercial banking assets held interstate increased from less than 2% in 1980 to over 15% at the beginning of 1990. Gains in asset control have been concentrated among fewer states than have the losses. Regional interstate banking pacts between states have caused the acquisition fields of banks to exhibit a strong regional character. Interstate banking acquisitions have led to differential growth rates among MSAs in headquartered banking assets, and a diminished share of headquartered assets accounted for by the nation's five largest banking centers.