Montana Division of Banking and Financial Institutions Commissioner Melanie Hall describes how her division brought together a group of bankers to advise on the modernization of the Bank Act, the legislative foundation for banking law in Montana.
Impact of Bank Failure is Sometimes Greater Than the Sum of its Parts
Nov 16, 2018
Staff at the Research and Statistics Division of the Federal Reserve Board recently published a working paper examining whether financial stress at small banks has a different impact on the real economy than financial stress at larger banks.
The working paper estimates that the failure of a single large banking organization with an assumed $100 billion in deposits would result in approximately a 107 percent decline in quarterly real GDP growth, whereas stress among five smaller banking organizations—each with an assumed $20 billion in deposits—would result in roughly a 22 percent decline in quarterly real GDP growth.
The paper is an important contribution to the research on the connection between bank size and systemic risk. The findings of the paper are critical to keep in mind as federal regulators seek to tailor regulations applicable to large and small banks while limiting potential damage to the economy in future financial crises.
Recent Blog Posts
Blog post
Today, the House Financial Services Committee approved unanimously a bill (H.R. 2514 or the COUNTER Act) to modernize and reform the Bank Secrecy Act (BSA).
May 9, 2019
Blog post
The annual CSBS National Survey of Community Banks has begun. Community banks are encouraged to share their experience, which provides useful information about their economic condition to policymakers and researchers.
May 9, 2019
Blog post
This month’s Data Corner shows two different measures – total brokered deposits reported by all banks over time and the number of banks reporting a non-zero level of brokered deposits.
May 8, 2019
