News Center

News from the Reed College public affairs office

Sociology prof to examine resilience and recession

By Randall S. Barton on July 08, 2015 02:21 PM

Prof. Marc Schneiberg wins NSF grant to examine how credit unions and community banks helped local economies weather the Great Recession.

Prof. Marc Schneiberg [sociology 2000-] has won a $170,824 grant from the National Science Foundation to investigate how community banks and credit unions helped Americans weather the Great Recession.

As American banking abandoned traditional roots and practices, it shed regulatory oversight and concentrated assets in a handful of giant or global banking corporations. These changes prompted not only a growing disconnect between banks and local economies, but an extraordinary run-up and debt within the financial system, setting the stage for a crisis.

Community banks and credit unions, on the other hand, sustained close ties to their communities rather than just pursuing shareholder value. Using new data on the American economy from 1994 to 2013, Prof. Schneiberg will analyze the effects of community banks and credit unions on communities and local economies and their capacity to sustain employment, vibrant business sectors, new business formation, and recovery.

Schneiberg hopes his study will contribute knowledge about how different kinds of banking affect community resilience during crises. He also hopes to identify new avenues for reform, including supplementing traditional regulation of “too-big-to-fail” banks with policies that support more local, community based and cooperative financial institutions.