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Interstate Banking and Small Business Finance: Implications from Available Evidence

Interstate Banking and Small Business Finance: Implications from Available Evidence The prospect of full interstate banking in the near future raises questions about the supply and cost of bank credit for small business firms under such a regime. This study explores this issue, drawing on the evidence of prior research. Specifically, the focus is on three questions: (1) the likely commitment of large, nationwide banks to the small business sector; (2) the implications of interstate banking for the viability of small, independent banks; and (3) the effect of nationwide banking on the overall level of local bank competition. The available evidence indicates little reason to expect the supply or cost of small business credit to be affected adversely by interstate banking. If anything, nationwide banking should increase the supply, and possibly lower the cost, of bank financing for small firms. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Journal of Small Business SAGE

Interstate Banking and Small Business Finance: Implications from Available Evidence

Rose, John T.
American Journal of Small Business , Volume 11 (2): 18 – Oct 1, 1986
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References (17)

Publisher
SAGE
Copyright
© 1986 SAGE Publications
ISSN
0363-9428
eISSN
1540-6520
DOI
10.1177/104225878601100203
Publisher site
See Article on Publisher Site

Abstract

The prospect of full interstate banking in the near future raises questions about the supply and cost of bank credit for small business firms under such a regime. This study explores this issue, drawing on the evidence of prior research. Specifically, the focus is on three questions: (1) the likely commitment of large, nationwide banks to the small business sector; (2) the implications of interstate banking for the viability of small, independent banks; and (3) the effect of nationwide banking on the overall level of local bank competition. The available evidence indicates little reason to expect the supply or cost of small business credit to be affected adversely by interstate banking. If anything, nationwide banking should increase the supply, and possibly lower the cost, of bank financing for small firms.

Journal

American Journal of Small Business – SAGE

Published: Oct 1, 1986

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