Small Banks: Transition and Crisis

Friday Virtual Seminar Series
Friday December 18, 2020
12:00 p.m. to 1:45 p.m.

This seminar is free. Please register at this Zoom link.
We can welcome up to 100 participants.

This session focuses on challenges faced by the banking sector, especially small banks, in the past 20 years. The first paper focuses on loss given default of acquisition, development, and construction loans during the Great Recession and its aftermath (2008-2012) and how those loan defaults contributed to numerous small bank failures. The second paper illustrates how monetary policy affects banks’ decisions to enter local deposit markets and how entry barriers in those markets affect establishments of differing sizes. The third paper explores how the tightening of anti-money laundering enforcement imposed disproportionate costs on small banks, shifting the local banking composition towards larger banks and how that shift affects measures of local economic well-being. The fourth paper studies the effects of changes in business credit during the COVID-19 pandemic comparing the behavior of lenders to that of borrowers during the pandemic compared to prior years and examining differences in credit issued to small and large borrowers, in both good and bad economic conditions.

Chair: Alexander B. Ufier (FDIC)

Loss Given Default for Acquisition, Development and Construction Loans
Lynn Shibut (FDIC), Emily Johnston-Ross (FDIC), Joseph Nichols (Federal Reserve Board)

The Bank Entry Channel of Monetary Policy Transmission
Stefan Lewellen (Penn State University), Emilio Bisetti (Hong Kong University of Science and Technology), Stephen A. Karolyi (Carnegie Mellon)

Anti-money Laundering Enforcement, Banks, and the Real Economy
Pablo Slutzky (University of Maryland), Senay Agca (George Washington University), Stefan Zeume (University of Illinois Urbana-Champaign)

Bank Lending during the Covid-19 Crisis
Teng Wang (Federal Reserve Board of Governors), Allen N. Berger (University of South Carolina), Christa H.S. Bouwman (Texas A&M University), Lars Norden (Getulio Vargas Foundation), Raluca A. Roman (Federal Reserve Bank of Philadelphia), Gregory F. Udell, (Indiana University)

Discussants: Kayla Freeman (University of Georgia), Freddy Cama (Bay Atlantic University), Heath Witzen (Consumer Financial Protection Bureau), Chacko George (FDIC)