BARREN, dry, desolate. These are words you might choose to describe the terrain left by California’s ongoing drought. But they apply just as readily to the landscape for bank startups in America. In the 25 years before Lehman Brothers collapsed, new banks were licensed at an average rate of 164 per year. Since, the industry has been suffering a seriously arid spell. In 2011 no new banks were licensed, making it the first such year since at least 1934. When Primary Bank, based in New Hampshire, opens its doors on July 28th, it will be just the second lender in America to do so in five years. And it will be a welcome sight, given that small banks play a vital role in the economy.
The new bank began in the mind of Bill Greiner, a New Hampshire businessman who had grown frustrated with large banks. In early 2008, he applied for a commercial-property loan from Citizens Bank, then an American subsidiary of the embattled Royal Bank of Scotland. But despite a proven track record and a 50% downpayment, he was turned away. Baffled, he turned to Hampshire First Bank, a local lender. The relationship was happy, but short-lived: in 2012, the...
from The Economist: Finance and economics http://ift.tt/1gQbiUl
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