TY - JOUR
T1 - The Functions of Australian Banks’ Branch Networks
T2 - The Diversification of Risks and Spatial Allocation of Capital
AU - Seltzer, Andrew J.
N1 - Publisher Copyright:
© 2018 Economic History Society of Australia and New Zealand and John Wiley & Sons Australia, Ltd
PY - 2018/11
Y1 - 2018/11
N2 - This paper examines the consequences of branch banking for the Australian economy. There is little evidence to show that branching increased the stability of Australian banking. During the 1893 crisis, banks with more extensive branch networks, particularly those that had rapidly expanded their networks during the long boom of 1866-89, were more likely to suspend payments. However, it is shown that branching increased the availability of capital and provision of banking services in rural areas. This occurred because, unlike unit banks, which were tied to a specific location, branch banks could internally reallocate capital from urban to rural regions at low cost.
AB - This paper examines the consequences of branch banking for the Australian economy. There is little evidence to show that branching increased the stability of Australian banking. During the 1893 crisis, banks with more extensive branch networks, particularly those that had rapidly expanded their networks during the long boom of 1866-89, were more likely to suspend payments. However, it is shown that branching increased the availability of capital and provision of banking services in rural areas. This occurred because, unlike unit banks, which were tied to a specific location, branch banks could internally reallocate capital from urban to rural regions at low cost.
KW - G21
KW - N27
UR - http://www.scopus.com/inward/record.url?scp=85056167217&partnerID=8YFLogxK
U2 - 10.1111/aehr.12151
DO - 10.1111/aehr.12151
M3 - Article
SN - 0004-8992
VL - 58
SP - 338
EP - 361
JO - Australian Economic History Review
JF - Australian Economic History Review
IS - 3
ER -