Banks could boost revenue by reducing or eliminating some fees imposed on checking accounts, writes Joanna Stavins of the Federal Reserve Bank of Boston.

Consumers reduce the amount of cash in checking accounts if banks impose per-item fees, charge for the return of checks, limit the use of tellers, or assess ATM surcharges, she concludes on the basis of a study of checking accounts offered in 25 big cities.

"Fees seem to deter bank customers and induce them to deposit their money elsewhere," she writes. "As a result banks have fewer accounts on which they can assess fees, leading to lower revenues."

Bounced-check fees are the exception. Based on her sample, a 1% increase in that fee results in a 3.68% rise in revenue.

For a copy of "Checking Accounts: What Do Banks Offer and What Do Consumers Value?" visit www.bos.frb.org/economic/neer/neer.htm.

The widely noted decline in the U.S. savings rate may not be so worrisome as some economists proclaim. Though people are saving less, the government and private industry are saving more, writes Francois R. Velde, an economist at the Federal Reserve Bank of Chicago. As a result, the overall savings rate is more positive than normally described.

He also finds that the cost of investments such as new production facilities has dropped significantly in the last 15 years. That means less savings are required to finance investment opportunities, he writes.

"That is not a sign that as a nation we are saving less and building fewer factories but rather that it is costing us less to build the same number of factories," he writes.

For a copy of "Americans Are Not Saving: Should We Worry?" call 312-322- 5111 or visit www.frbchi.org.

Half of all Asian banks will be involved in mergers within two years, write Nicolas Leung, Jean-Marc Poullet, and Timothy Shavers of McKinsey & Co.

The analysts argue that Asian governments are forcing banks to recapitalize quickly. This will force them to look for outside investors and, ultimately, will lead to mergers.

Asian governments also have more than $15 billion of nationalized bank assets they need to sell to the public, they write.

The acquiring banks must overcome numerous challenges to make these deals work, they write. For instance, they must determine how to value a foreign bank, how to lobby a foreign government to support their deal, and how to conduct adequate due diligence.

"When the current Asian crisis has passed, a handful of banks will have emerged in each market as the leaders-and they may not be today's top names," they conclude.

For a copy of "Asian Banking: After the Storm," call 312-551-3787.

The Federal Reserve Bank of Boston has issued a compendium of papers on what causes business shocks. Studies explore financial crises in the United States, the role of interest rate policy, global financial crises, technology, and job reallocation.

The compendium also includes four studies discussing steps policymakers could take to reduce the severity of business shocks.

For a copy of "Beyond Shocks: What Causes Business Cycles," fax a request to 617-973-4221 or e-mail boston.library bos.frb.org.

Research Scan runs on the second and last Fridays of the month. Submissions should be sent to American Banker, 1325 G St. NW, suite 900, Washington, D.C. 20005.

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