On Tuesday 6th of June, from 11:00 - 13:00 GMT, hub.cepr.org & cepr.org websites will be undergoing scheduled maintenance. During this time, you will not be able to access hub.cepr.org at all, and there will be limited functionality on cepr.org.
If you have any questions, you can reach the admin team at itsupport @ cepr.org

Discussion paper

DP9146 Bankers and bank investors: Reconsidering the economies of scale in banking

We study economies of scale in banking by viewing banks as combinations of financial and human capital that create rents which accrue to investors and bankers. Applying this approach to annual data of US bank holding companies since 1990, we find much stronger evidence of economies of scale in returns to bankers as compared to returns to investors. The scale economies appear to be particularly strong in the top size decile of banks measured by total assets. We find that rents accruing to bankers are particularly strong in banks with a relatively large share of non-interest income and that for the largest banks a reduction of net interest margin is associated with an increase in bankers' rents. We find incorporating observable proxies for funding efficiency and presence in wholesale banking activities greatly reduces the pure size effect.


Anderson, R and (eds) (2012), “DP9146 Bankers and bank investors: Reconsidering the economies of scale in banking”, CEPR Press Discussion Paper No. 9146. https://cepr.org/publications/dp9146