The first uncertainty concerns the possible consequences of balance-sheet adjustments in advanced economies. In the United States and European advanced economies, the process of dealing with excessive household debt, excess production capacity in the corporate sector, and impaired assets in the financial sector, that is, the process of repairing and adjusting balance sheets, is continuing.
3 Even as the number of banking institutions has been declining, the number of banking offices (branches plus headquarters) has been growing. Not surprisingly, big banks have been the drivers of the increase in banking offices. Since 1989, the number of community bank offices has declined by about 14 percent.