Geographic Diversification and Banks' Funding Costs

文献类型： 外文期刊

第一作者： Levine, Ross

作者： Levine, Ross;Levine, Ross;Lin, Chen;Xie, Wensi

作者机构：

关键词： banking; banking regulation; funding cost; financial stability

期刊名称：MANAGEMENT SCIENCE （ 影响因子：4.883； 五年影响因子：6.619 ）

ISSN： 0025-1909

年卷期： 2021 年 67 卷 5 期

页码：

收录情况： SCI

摘要： We assess the impact of geographic diversification on a bank's costs of interest-bearing liabilities. We employ a new identification strategy and discover that geographic expansion across U.S. states lowered funding costs. Consistent with expansion facilitating risk diversification, we find that (1) funding costs fall more when banks expand into states whose economies are less correlated with the banks' state and (2) geographic diversification reduces the costs of uninsured, but not insured, deposits. Consistent with expansion intensifying agency frictions, which puts upward pressures on funding costs, we discover that geographic diversification reduces the costs of interest-bearing liabilities more in better-monitored and better-run banks.

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