U.S. Senate Committee on Banking, Housing, & Urban Affairs
"The Impact of the Dodd-Frank Act on Banks’ Noninterest Expenses"
This discussion will examine the changes in commercial banks’ noninterest expenses following the Dodd-Frank Act of 2010. We use quarterly data on U.S. bank holding companies from 1995 through 2015 to test for changes in the levels and growth rates of noninterest expenses following the passage of Dodd-Frank. We account for factors affecting noninterest expenses that are not related to regulatory compliance costs such as loan charge-offs, residential lending, deposits, and general economic activity. Contrary to other studies, we find statistically and economically significant increases in both the growth rates and the levels of noninterest expenses as percentages of total assets. The increases are most clearly identifiable for small and community banks with $10 billion or less in total assets, but they are often larger in magnitude for large and regional banks with total assets of $10 billion or more. These results are consistent for salary and non-salary, noninterest expenses. Link to the working paper: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2832288
Thomas Hogan is Chief Economist for the U.S. Senate Committee on Banking, Housing, & Urban Affairs.
Dr. Hogan is currently on leave from Troy University where he is Assistant Professor of Finance in the Johnson Center for Political Economy. He earned his Ph.D. in Economics from George Mason University and holds Bachelor's and Master's degrees in Business Administration from the University of Texas at Austin.
Dr. Hogan wrote his dissertation on money, banking, and finance. He also specializes in international development and Austrian economics. His research interests include commercial banking, financial institutions, and monetary theory.
Dr. Hogan was formerly Assistant Professor of Economics at West Texas A&M University. He has worked for Merrill Lynch's commodity trading group and for investment funds in the U.S. and Europe. He has been a research fellow at the Cato Institute and the American Institute for Economic Research and is a former consultant to the World Bank.
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