US banks may be suppressing their natural growth to avoid the heightened regulation that kicks in as they get larger, research by Federal Reserve economists shows.
The amount of assets a bank holds determines the degree of regulation it faces. At $10 billion, banks become subject to Dodd-Frank stress tests. Many more rules take effect when an institution grows beyond $50 billion, and a greater number applies at the $250 billion and $700 billion levels.
Fed economists found that these