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Minority‐Owned Banks and Bank Failures After the Financial Collapse
Author(s) -
Kashian Russell,
Drago Robert
Publication year - 2017
Publication title -
economic notes
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.274
H-Index - 19
eISSN - 1468-0300
pISSN - 0391-5026
DOI - 10.1111/ecno.12068
Subject(s) - disadvantaged , census , bank failure , real estate , business , finance , economics , financial system , economic growth , demography , population , sociology
Minority‐owned banks (MOBs) are small banks, which often serve disadvantaged communities of color, and failed at high rates after the financial collapse. The U.S. Census and FDIC data are used to analyse bank failures for 2009–2014, with predictors from 2008, using logistic regression for estimation. Failure rates were high among Black and Asian American–owned banks; these are related to bank failures in African American communities and concentration in commercial real estate lending; policy responses to the collapse were generally ineffective for small banks. We conclude that policy support for MOBs operating in disadvantaged communities of color is warranted.