No Small Matter

A recent paper in the NBER Digest shows that increased banking regulation hurt small businesses. The paper by Michael D. Bordo and John V Duca found the Dodd-Frank Act “reduced the incentives for all banks to make small loans.”

Just as in auto finance, big banks were better equipped to meet new regulatory demands.  This causes small banks to either sell themselves to bigger players or issue fewer loans. Small banks are the traditional funders of small businesses.

That’s the reality of increased regulation. In order to get less “bad stuff,” you’re going to get less stuff period.

 

Last modified on Tuesday, 03 July 2018 15:45

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