Size,Growth, and Variance among the World's Largest Non-merged Banks

This paper analyses growth, size, and variance of the capital, assets, and pre-tax profits of large international banks during 1987-97.We test hypotheses on whether size matters. It turns out that there is an inverse relationship between the amount of bank capital, assets, and profits and the growth rate of these items.This is in line with the findings for US banks in the pre-BrettonWoods era. Furthermore, we did not find, in contrast with Tschoegl's observations for international banks in the 1970s, a negative relationship between the size of large banks and the variability of growth in capital, assets, or profits. We conclude that size is not a self-sustaining attribute of international banks.