TAILIEUCHUNG - The challenges facing community banks: In their own words

The best available evidence indicates that approximately $300,000 was deposited into the hijackers’ bank accounts in the United States by a variety of means. Just prior to the flights, the hijackers returned about $26,000 to one of their al Qaeda facilitators and attempted to return another $10,000, which was intercepted by the FBI after 9/11. Their primary expenses consisted of tuition for flight training, living expenses (room, board and meals, vehicles, insurance, etc.), and travel (for casing flights, meetings, and the September 11 flights themselves). The FBI believes that the funds in the bank accounts held by the hijackers were. | The challenges facing community banks In their own words Robert DeYoung and Denise Duffy Introduction and summary When economists analyze an industry they typically do so at arms length using a combination of theoretical models and large amounts of statistical data. The theoretical models describe the interplay between the structure of the industry and the competitive behavior of the firms that populate the industry. The statistical data which may include financial ratios industry trends and peer group comparisons serve to personalize the sterile one-size-fits-all nature of the theoretical models. But most industry studies never get especially close to the people most responsible for the industry data the managers and owners who make long-run strategic plans that shape the data who make shortrun competitive decisions in response to the data and whose careers and companies are ultimately defined by the data. In this article we analyze the . community banking sector a sector populated by small firms that hold a shrinking share of an increasingly competitive and technology-based financial services industry but we rely on an atypical approach to perform the analysis. We use numerous first-hand observations made by individual community bankers collected during a Federal Reserve survey in August 2001 Federal Reserve System 2002 to complement the usual data-intensive industry analysis. Although the survey itself was an effort to learn about the evolving payments services needs of community banks the surveyed bankers also made wide-ranging observations on a variety of other topics including the fundamental mission of community banks the threats and opportunities posed by large banks perceptions that the playing field is not always level and the growing tension between traditional high-touch relationship banking and potentially more efficient high-tech banking. Augmenting systematic industry data with bankers anecdotal observations humanizes our analysis. The bankers .

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