The Effects of Interstate Banking on Commercial Banks' Risk and Profitability

Publisher Website
Google Scholar
Abstract
Historically, the effect of interstate banking on the risk and profitability of commercial banks has been a controversial issue. Using capital market data and an event study methodology, we test the effects of interstate banking. The findings of this paper reject the hypothesis that interstate banking has no effect on banks' risk and profitability. The evidence supports the argument that interstate banking benefits commercial banks in terms of increased profitability. But the increase in profitability is also associated with significant increases in the banks' exposure to market risk.

This publication has 0 references indexed in Scilit: