| Abstract: | U.S. commercial bank failures approached historically high levels in the 1980s. The collapse of such institutions can have severe impacts on local economies, disrupting the supply of available investment credit. This paper situates bank failures within the broader transformation of global capitalism in the late 20th century. Next, it reviews the causes of bank insolvency, including mismanagement, deregulation, the glutted commercial real estate market, and depressed agricultural and petroleum-dependent local economies. It then illustrates multiple aspects of the spatial distribution of bank failures. A pooled time-series regression analysis, using primary causal variables as well as location quotients of state output in four industrial sectors, indicates that with the vital exception of petroleum, and to a lesser extent services, regional economic structure is not strongly related to bank failures. This finding likely reflects the structural and spatial transformation of the industry as it adapted to the highly competitive conditions of the last decade. |
