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March 8, 2024- The Federal Reserve Board announced a final rule that updates risk management requirements systemically important financial market utilities supervised by the...
Access to finance is a crucial component of economic development. This column studies the effects of Brazil’s ‘Banks for All’ programme, which targeted underbanked cities not served by government-owned banks. It finds a strong positive effect of the policy on the number of bank branches and on the overall amount of credit and deposits, particularly for cities located in
Corporate bankruptcy and banking competition: the effect of financial leverage Image In our recent working paper, we study the effect of a change in banking competition on firms’ bankruptcy rates in the United States. We know from empirical evidence that banking competition typically decreases interest rates, makes it easier for firms to access bank credit (Boyd and De Nicolo 2005), and leads to economic growth (Jayaratne and Strahan, 1996). Kerr and Nanda (2009) further show that following episodes of banking deregulation, entry and exit of firms increase, reinforcing Schumpeterian competi...