Bauer Business Focus

Relevance of Local Banks

Do they continue to play an essential role?


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Banks are growing larger and their brick-and-mortar footprints are steadily shrinking. Assistant Professor Elizabeth Berger with the Bauer College of Business at the University of Houston says the natural question is: Do local banks matter anymore?

“Even as banking seems to shift to the national level, local bankers have their fingers on the pulse of their communities. They have an advantage in gauging local economic developments, supply and demand, and have what's called "soft information" that comes from personal connections to assess credit risk.”

“As local investment opportunities emerge, local banks step in to provide capital. These new businesses create jobs, that have been the cornerstone of recent economic growth in the U.S. Despite the impact of large national banks, local banks continue to play an essential role in the U.S. economy.”

For more stories from the Bauer Business Focus, click here.