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Journal of Regulatory Economics

, Volume 55, Issue 2, pp 214–236 | Cite as

Has Dodd–Frank affected bank expenses?

  • Thomas L. HoganEmail author
  • Scott Burns
Original Article

Abstract

This paper examines the potential effects of the Dodd–Frank Act of 2010 on banks’ noninterest expenses. Using data on U.S. bank holding companies from 1995 through 2016, we test whether noninterest expenses increase following the passage of the Dodd–Frank Act or in relation to the number of banking regulations implemented after Dodd–Frank. We analyze subsamples of banks above and below $10 billion in total assets and consider total noninterest expenses, salaries, non-salary expenses, and specific subcategories of non-salary expenses: legal, consulting, auditing, and data processing. Non-salary expenses for both large and small banks show a one-time increase after Dodd–Frank, while salary expenses tend to increase with regulations. The results indicate that total noninterest expenses for the banking system are higher on average by more than $50 billion per year compared to before the Dodd–Frank Act.

Keywords

Dodd–Frank Bank expenses Regulation Compliance Federal reserve 

JEL Classification

E58 G21 G28 

Notes

Acknowledgements

For helpful comments and suggestions, the authors thank Nicholas Cachanosky, Robert DeYoung, Joshua Hendrickson, Travis Hill, W. Douglas McMillin, Neil R. Meredith, two anonymous reviewers, and session participants at the Southern Economic Association annual conference and the Research Seminar on Financial Markets Regulation by the Institute of Humane Studies and the Mercatus Center.

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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Baker Institute for Public PolicyRice UniversityHoustonUSA
  2. 2.Ursinus CollegeCollegevilleUSA

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