Statement I: Banks in unit banking states are generally larger than banks in states that do not require unit banking.
Statement II: Two out of five states have unlimited branching.

Question

Quizplus · Accepted Answer

Statement II is true, as two out of five states (Illinois and North Dakota) have unlimited branching. However, statement I is false. In fact, banks in states that require unit banking (such as Illinois and Texas) are generally smaller and less diversified than banks in states that allow interstate and intrastate branching. This is because unit banking laws limit banks to operating only one branch in a single location, which makes it harder for them to spread their risks and access a larger customer base.

Statement I: Banks in Unit Banking States Are Generally Larger