"John W. Ryan Award for Most Significant Contribution to Community Banking Research" Announced

The Community Banking Research Conference research committee is pleased to announce the selection of “Bank Loan Markups and Adverse Selection” as the paper chosen for the "John W. Ryan Award for Most Significant Contribution to Community Banking Research" as part of the 2022 Community Banking Research Conference.

The authors of the winning paper are: 

  •  Mehdi Beyhaghi, Federal Reserve Bank of Richmond; 
  •  Cesare Fracassi, University of Texas at Austin and 
  •  Gregory Weitzner, McGill University, Montreal, Canada. 

Here is a summary of their paper from the 2022 Conference Volume

The authors analyze market power in local U.S. corporate loan markets. They find that, in contrast to typical theories of competition, loan markups are higher in regions in which more banks operate. They provide evidence that this result is driven by asymmetric information across banks, which becomes exacerbated as the number of banks increases. They also provide causal support for the role of adverse selection by showing that markups drop following a shock to large banks’ lending capacities, which reduces asymmetric information in local lending markets. Their findings suggest that adverse selection is an important driver of market power in local bank markets and has implications for antitrust policy.

 Gregory Weitzner
 Gregory  Weitzner of McGill University, Montreal, Canada, presents his team’s award-winning paper
 at the 2022 Community Banking Research Conference on Sept. 28, 2022.

Read the full paper or review the PowerPoint presentation of author and presenter Gregory Weitzner on the CBRC website. Video of the presentation will be posted at a later date.

The award was renamed as part of the 10th annual conference in honor of the late John Ryan, the CSBS President and CEO who helped found the conference. 

“John’s vision of connecting academics, community bankers and regulators to build research has had a significant impact on policy,” said CSBS President and CEO Jim Cooper. “John looked forward to the conference and in particular the academic papers presented. I am pleased that his legacy will live on through this award.”

In addition, 2022 was the first year the award winners were announced at the end of the conference; in the past, the announcement was made a few weeks later. 

Past winners of the award can be found in the 2022 Conference Volume