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The available evidence is partly consistent and partly inconsistent with a negative association of branching restrictions and the number of banking offices. In this paper, I present evidence that the failure to consistently find such a negative association of branching restrictions and banking offices is quite robust. I suggest that the endogeneity of the banking restrictions and regulators' unmodeled behavior are the basic source of the inconsistency. I conclude that there is no evidence that suggests substantial changes in the number of banking offices with the introduction of interstate branching.

Many states still limit or prohibit commercial bank branching. In addition, the McFadden Act prevents banks from branching across state lines. It has been suggested that anti‐branching laws inhibit competition in the banking industry. This follows from the notion that bank markets are localized, and that anti‐branching laws prevent banks from penetrating local markets adjacent to their main offices. Two interesting hypotheses arise from this conjecture. First, do banks operating in unit‐banking states have a profit advantage over their counterparts in states that allow state‐wide branching? And second, is there any significant difference in profitability between banks in limited‐branching states and banks in state‐branching states? In other words, are there diminishing returns to branching deregulation? Research reported in this paper answers these questions.

The International Banking Act (IBA) of 1978 sharply restricted the ability of foreign banks to establish offices in more than one state. Yet during the late 1970s and early 1980s barriers to interstate banking with regard to US financial institutions were beginning to fall. The most important fact that contributed to foreign bank involvement in interstate commerce was the grandfather provision, which permitted multistate networks to remain in operation. New interstate banking has been curbed by restrictions on full‐service offices, but it has continued to develop through Edge‐Act Corporations, bank holding companies and the use of non‐bank banks. Interstate banking is likely to benefit the public and will probably continue to expand but at a slower rate and more in line with that of US banks.

Foreign commercial banks seeking to establish a multi‐state presence in the US have followed different approaches, including the use of loan production offices (LPOs) examined here. These are used primarily to facilitate off‐premise lending to borrowers outside the local service area, and are authorised to undertake all aspects of loan production except final approval and disbursement of funds. The policies regarding LPOs established by different states vary from complete prohibition to virtually unrestricted entry.

This chapter examines the transition in the US banking industry from a community to a national logic, developing a general model to explain how and when shifts in institutional logics occur. Based on qualitative historical evidence and discrete-time event history analysis predicting the introduction of legislation favoring the national logic, this chapter proposes that dramatic exogenous events such as the Great Depression or more gradual processes such as modernization favored the industry's transition to the national logic, but that such exogenous events had a greater influence in areas where strategic actors could capitalize on them. The qualitative evidence presented here suggests that struggles involving organizational identity and “legitimacy politics” played an important role in the shift in logics. Our theorizing focuses on how, when the environment changes in an incremental fashion, actors are primed with new possibilities, which may shift their collective identities, but when environmental changes are discontinuous, they provide actors strategic opportunities to alter the balance of logics in the environment.

Deregulation and other factors permit and encourage financial institutions to become more integrated, both within their own (financial) industries, such as banking and insurance, and across these industries. Financial regulators have responded with like integration. As financial institutions increasingly compete with firms from other industries and areas, financial regulators similarly compete more across borders. The resulting competition in financial regulation enhances innovation, choice, and efficiency. The advent of home-run regulation, which in general allows financial institutions to adhere only to the financial regulations of their home area and is spreading across the US and Europe, may allow numerous regulatory regimes within a given market.

Recent institutional scholarship has discovered new possibilities for change in both the accumulation of incremental transformations and in the skillful action, institutional work, and creative activities of political and institutional entrepreneurs. Lurking behind stability and change lie actors who can act reflexively within and with existing institutions, and who do so on a routine, rather than exceptional basis, redeploying, recombining, and transposing extant systems to solve problems of identity and control. This paper probes the potentials and limits of those possibilities – and the prospects for reform in American banking – via a case study of the Bank of North Dakota and efforts to transpose its hybrid model of state and community logics into other states. The analysis first finds a full range of institutional labors and skillful activities emphasized by recent work as the foundation for transposition. It finds crisis; the presence of multiple logics; the mobilization of boundary spanning networks; the use of conferences and theorization to sustain independent discourse and collective identities; skillful framing; and substantial editing and recombination to fit the model with receiving states’ institutions. It then juxtaposes these conditions with outcomes in the states, developing some implications for actor-centered institutionalisms, current preoccupations with mechanisms, and state-level strategies for financial reform.

Purpose – This chapter compares the stability of the U.S. Dual Banking system's two bank groups, national and state banks, in light of the current financial crisis. The goal of the chapter is to answer three distinct questions: first, is there a difference in the (balance sheet) fragility between the two groups and, second, to what extent has the balance sheet fragility of both groups changed after the escalation of the financial crisis beginning in August 2007? Building on that, the third question asks to whether or not the respective regulatory agencies of both bank groups are responsible for these changes in balance sheet fragility in light of the financial crisis.

Methodology – To answer these questions the chapter uses U.S. Call Report data containing full quarterly balance sheets and P&Ls of all U.S. commercial banks over the period 2005–2008. Anecdotal evidence as well as univariate and multivariate difference-in-difference methodology focusing on the immediate pre-crisis period Q1/2005–Q3/2007 and the crisis period Q3/2007–Q4/2008 are applied.

Results – Highly significant and robust results show that, ceteris paribus, national banks reduced their potential balance sheet fragility after the escalation of the crisis in August 2007 by reducing lending and liquidity creation stronger than state banks. Anecdotal evidence supports the empirical findings. Although both FDIC and OCC did not anticipate the adverse effects of the crisis, the OCC publicly showed an earlier reaction to liquidity-related problems than the FDIC.

Originality – The chapter is the first of its kind to analyze bank fragility around the escalation of the financial crisis and the role of the regulatory agencies. The chapter holds especially interesting policy implications in the light of the current discussion about the future regulation of the banking markets.

The 1896 presidential election between William Jennings Bryan and William McKinley has new salience in the wake of the 2016 presidential contest. We provide the first systematic analysis of presidential voting in 1896, combining county-level returns with economic, financial, and demographic data. We show that Bryan did well where interest rates were high, railroad penetration was low, and crop prices had declined. We show that further declines in crop prices or increases in interest rates would have been enough to tip the Electoral College in Bryan’s favor. But to change the outcome, the additional changes would have had to be large.

This chapter explores the political economy of banking in Texas at the turn of the last century. The empirical work sheds light on why Texans voted to allow the chartering of banks by the state government. The evidence shows that county-level voting patterns for state-chartered banks were significantly related to business interests, consumer interests, agricultural activity, and the presence of existing national banks. The work also shows that the first counties to receive the new state banks were associated with higher agricultural activity, larger population size, and the presence of existing national banks. By examining the vote and the location of early entrants in state banking, this chapter contributes to the literature exploring the historical development of state-chartered banking and the dual-banking system in the US.