THE REGIONAL DISTRIBUTION OF BANK CLOSINGS IN THE UNITED-STATES FROM 1982 TO 1988

There is growing evidence that many types of financial activity are regionally differentiated. The most recent, and perhaps most pronounced, evidence of regionally differentiated financial activity is seen by the number of commercial bank closings in the 1980s. Between 1982 and 1988, the Federal Deposit Insurance Corporation closed 807 commercial banks in the 50 states due to various financial difficulties. In contrast to the period 1943-81, which averaged 6 bank closings per year, 1982-88 averaged 115 bank closings per year, with a small number of states accounting for the majority. Texas led the way with 217 bank closings, followed by Oklahoma with 92 and Kansas with 50. These three states, contiguously located in the south central plains, accounted for 44.5% of the total. Moreover, three-fourths of the bank closings occurred in 10 states, with 8 of the states located in the central plains between the Rocky Mountains and the Mississippi River. With the ultimate objective of preventing future bank closings, this study seeks to identify the critical factors causing the regional differentiation of bank closings between 1982 and 1988. -from Author