CFS Lecture

– in cooperation with the House of Finance and the Institute for Banking and Finance e. V.

Interest in creating state banks in the United States has increased dramatically in recent years. Six states have recently introduced legislation to start a state bank. An important development in favor of a state bank is the long (100+ years) and impressive record of the only state bank in the United States, the Bank of North Dakota (BND).

To better understand BND’s success and the possibilities for a successful state bank in the United States, this paper compares the financial performance of the BND to that of national commercial banks. Claims by the BND as to the sources of their success (low-cost deposits and lending acuity) are evaluated and rejected by the data. Other factors are identified that fully explain the BND’s abnormal profitability. There is no ‘secret sauce,’ and the BND does not provide support for a special role for a state bank.

Moderation: Prof. Dr. Rainer Klump, Director CFS and House of Finance, Goethe University Frankfurt

The event will take place at the House of Finance, Goethe University Frankfurt.