Productivity in banking

FRBSF Economic Letter #2001-22 dated July 27, 2001

In the latest Economic Letter, Fred Furlong, San Francisco Federal Reserve Bank Economist and Vice President of Financial and Regional Studies, discusses productivity trends in banking, focusing on the role of deregulation as well as on the impact of information technology on the industry’s labor needs.

Now available on the Internet at: www.frbsf.org/publications/economics/letter/2001/el2001-22.html

Productivity growth in banking has been strong for almost 20 years, well in advance of the national economy’s technology-driven productivity surge in the last half of the 1990s. This timing suggests that the impetus for banking firms to push for greater productivity also came not only from advances in information technology, but also from other factors, namely, deregulation and increased competition, which led to the acceleration of the broad restructuring in banking.