Kilian Huber on Who Benefits When Banks Get Bigger

chicagobooth.edu/review | The debate over how big banks should be allowed to be has been a durable one in US public policy. Some advocates of loosening restrictions on bank size suggest that larger banks create economies of scale that are good for the bank, its customers, and the economy more broadly. Chicago Booth’s Kilian Huber looked at what happened in postwar Germany when banks broken up by the Allies were allowed to reconsolidate. He finds that in that case, the primary beneficiaries of bigger banks were bank managers themselves.

[@dap94]

Standard economic theory is wrong. Shocking! The Managers seemed to have benefitted from larger banks. I am gobsmacked!!! Great research. How would we have known?

[@omari3655]

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