From my perspective, these findings offer evidence of the continuing importance of community banks to our economy during both “normal” times as well as during times of extreme financial stress. Or, to paraphrase Mark Twain, “reports of the demise of community banks are greatly exaggerated." The NBER paper also highlights how new entrants to banking can meet an unmet need.
Here, a good example is the development of a new supply channel for financial services, namely the internet, which has made it possible to establish extensive and low-cost financial networking. Traditionally, the provision of financial services was very much dependent on the branch networks of financial institutions.