BIRTHS, DEATHS, AND MARRIAGES IN THE U.S. COMMERCIAL BANKING INDUSTRY

Regulatory change not seen since the Great Depression swept the U.S. banking industry beginning in the early 1980s and culminated with the Interstate Banking and Branching Efficiency Act of 1994. This article examines whether deregulation affected new charter (birth), failure (death), and merger (marriage) rates of U.S. commercial banks from 1978 to 2004 after controlling for bank performance and state economic activity. We find strong evidence that intrastate and interstate deregulation stimulated marriages, but not births or deaths. Finally, temporal causality tests show that mergers temporally lead to new charters and that failures lead to mergers (a demonstration effect) . ( JEL G21, L51)