THE INTERACTION EFFECTS OF RESTRICTIONS ON BRANCHING AND OTHER BANK REGULATIONS

The article looks at the impact of interaction effects between restrictions placed on branching and other regulatory restrictions. A model which expresses structural characteristics as a function of branching restrictions is used. The author assumes that differences in the operations of unit and branch banks are accounted for by this function. Structural characteristics of the banking system related to branching restrictions are discussed and measured. The impact of regulations on expected structural changes resulting from altered restrictions on branching is considered. A study conducted by Paul Horvitz and Bernard Shull which supports the article's findings is mentioned.