Richmond Fed Cites Regulation As Barrier for New Bank Entry

Federal Reserve

On March 5, researchers from the Federal Reserve Bank of Richmond released an essay highlighting the decline in the formation of new banks since the financial crisis. According to the essay, new bank formation has fallen from an average of approximately one hundred per year since 1990 to about three per year since 2010. The researchers cited increased banking regulations, the low interest rate environment, and a weak economic recovery as contributing factors for the low rate of new bank startups.