Bigger is better, at least when it comes to bank efficiency. A study by Federal Reserve Board economist Allen N. Berger and Federal Reserve Bank of Philadelphia economist Loretta J. Mester finds that the optimal size for a bank is around $25 billion of assets.

Banks with less in assets are not taking advantage of economies of scale, the study found, and those with more are too large to operate at top efficiency.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.