April 2024: Banks in Space

University of Chicago BFI Research Brief
by Ezra Oberfield, Esteban Rossi-Hansberg, Nicholas Trachter, Derek Wenning

The banking deregulation of the 1980s and 90s provides unique evidence of the way in which banks set up their branches across locations. Two forms of sorting explain observed location patterns well. Sorting on size, whereby top banks locate in the largest markets and smaller banks in marginal ones, and sorting according to funding needs whereby banks locate in regions that allow them to balance their loans and deposits.

University of Chicago BFI Research Brief – Banks in Space