US community banks losing their edge with small businesses, paper finds


A discussion paper, published by the Federal Reserve at the end of last year, challenges conventional wisdom that small businesses do more business with small, ‘community' banks, finding instead that such firms are just as likely to use a large ‘megabank'.

The paper: Do small businesses still prefer community banks?, by Allen Berger of the University of South Carolina, William Goulding of MIT and Tara Rice, an economist at the Federal Reserve, suggests that changes in lending technologies and

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