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Financial Restructuring and Regional Economic Activity

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The relationship between the performance of the financial sector and economic activity has received increasing attention from economists during the past decade. Empirical studies generally support the view that financial structure and stress can have real economic effects. This paper explores the impact of financial restructuring on economic activity by using an alternative data set that in some respects more completely measures change in the local banking sector than do data used in previous research. Results suggest that the deaths of midsized banks have a negative but short-lived impact on economic activity.

Suggested citation: Cromwell, Brian A. “Financial Restructuring and Regional Economic Activity,” Federal Reserve Bank of Cleveland, Economic Review, vol. 26, no. 3, pp. 13-25, 09.01.1990.

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