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Unit Banking

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Unit Banking
A system of banking in which the government restricts or does not permit a bank to open branch offices. Unit banking systems encourage either small, independent banks or banks that are theoretically independent but are in fact owned by a bank holding company. In the United States, unit banking is largely confined to the Midwest and Southwest.


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Proponents of unit banking also argue that branching will hurt the small local borrower as the bigger, and more distant, bankers will perhaps be less willing to extend credit (Jay (1933)).
has been almost unique in preserving a unit banking system," and that it had achieved this distinction by means of legal "barriers against interstate banking" (Friedman and Schwartz 1986: 54).
For example, Flannery (1984) presents evidence that banks in unit banking states (i.
 
 
 
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