United States bank migrations and deposit dollar concentrations

Date created: 
Legal Geography
Banking Regulation
Regulatory Arbitrage
Interjurisdictional Competition
Spatial Analysis

This thesis incorporates four studies of the geography of bank offices and deposits in the United States (US). The research examines changes in retail bank branch proximity in neighborhoods, state banking law's role in motivating banks to relocate home offices, and the significance of tax avoidance driving deposits’ relocations. Chapter 1 introduces the framework and research questions that emerged from visually exploring geo-spatial banking data. Chapter 2 considers retail bank proximity changes in neighborhoods, classified by income, in urban Florida. It compares three pre- and post-financial crisis bank branch distributions: those merged with government assistance, those that merged unassisted, and those that did not merge. Did the branching decisions made by any of these bank groups disproportionately affect neighborhoods’ proximity to banks? Kruskal–Wallis and post hoc tests suggest that merged banks, which reduced total branches, did not disproportionately impact any neighborhood group. Statistically significant evidence suggests that unmerged banks, which increased total branches, disproportionately improved proximity to high-income areas, filling a spatial void created by closed offices of merged banks. The results suggest that banking regulators indirectly financed the rearrangement of banking offices, conflicting with federal policies aimed at maintaining bank offices near low-income neighborhoods. Chapter 3 examines the forces that drove a massive accumulation of deposits in Delaware and South Dakota, illuminating changes in banking regulation that lured banks from faraway places. Delaware and South Dakota broke longstanding public policy norms by creating bank-friendly regulation of three banking businesses: credit, insurance, and trusts, becoming a preferred legal “home office” for banks seeking regulatory relief. Chapter 4 traces the laws that helped induce Wall Street banks and other commercial firms to migrate to Utah. Utah expanded the scope of a historical anomaly in US banking regulation, the Industrial Loan Bank, which is exempt from longstanding regulatory norms separating banking from a non-banking business. The final chapter considers the lopsided share of deposits in Delaware, Nevada, South Dakota, and Utah after the flight of deposits from high-tax states. This research contributes to and suggests research possibilities on the oft-neglected subject of fiscal geography.

Document type: 
This thesis may be printed or downloaded for non-commercial research and scholarly purposes. Copyright remains with the author.
Geoff Mann
Environment: Department of Geography
Thesis type: 
(Thesis) Ph.D.