No New Banks Launched Since 2009
Historically, the regular creation of new banks
stalls during a recession, but rebounds during a recovery. However, no new banks
have been formed in North Carolina since 2009, according to the state Office of
the Commissioner of Banks. That compares to the 28 formed in the five-year
period ending in 2008. State Commissioner of Banks Ray Grace said, “Unlike
previous economic downturns, we have not seen a resurgent interest on the part
of investors or other groups to start new banks on the upside.” The situation
in North Carolina mirrors a national trend, as only one new bank was formed in
2013. A tightening of regulations in the wake of the recession has made banking
less attractive to investors, as have the poor returns notched in the last
decade.
What This Means For Small Business:
Small business owners are heavily reliant on local banks for loans they need to
grow their enterprises. With fewer local banks, there are fewer ways to get
that needed capital. This is of particular concern as other sources of capital
have dried up in the wake of the financial crisis in 2008.
Further Reading:
The Raleigh
(NC) News & Observer
runs a story on the subject.
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