Fed’s Quarles: Community banks can compete with larger banks

Fed’s Quarles: Community banks can compete with larger banks

By

Senior economics reporter

Community banks have been able to compete quite successfully with larger banks in both urban and rural markets in the aftermath of the recent recession, said Federal Reserve Vice Chairman for Supervision Randal Quarles, on Thursday. “Urban and rural community banks face different challenges, but, on average, both seem to be faring well in the post-crisis period,” Quarles said, in a speech to a community banking research conference sponsored by the St. Louis Fed. While the number of community banks has been declining over the last 20 years, community banks still account for more than 95% of banks operating in the U.S. One troubling trend is a wave of industry consolidation has led to a loss in the number of bank headquarters offices. The number of bank headquarters in urban markets has fallen by 50% over the past 20 years, while the number in rural markets has fallen by 45%.

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