Firms that depend on the banking sector get wider access to finance after deregulation, according to a paper from the Federal Reserve. ‘Firm volatility and banks: Evidence from US banking deregulation', published in November, finds this to be the case based on evidence from state-level banking deregulation in the 1980s.

The paper shows that firm-level employment, production, sales and cash flows demonstrated reduced volatility after interstate deregulation, especially in the case of firms that