The tendency for large banks to have a higher return on equity than small banks suggests:

Question

Quizplus · Accepted Answer

The higher return on equity for large banks suggests that there could be significant economies of scale in banking. Larger banks may be able to reduce costs per unit of output due to their size, which can lead to higher profits and return on equity. This does not necessarily mean that small banks have worse management or that larger banks can charge higher interest rates or escape regulation costs.

The Tendency for Large Banks to Have a Higher Return