The Risks of an Aging Population to Community Financial Institutions w/ Gazi Kabas

Behind the Vault Episode 8

The stark difference in deposits and borrowing by age group

How does the age distribution in your community directly impact your institution’s risk? In this episode, we talk with Gazi Kabas, co-author of the oft-cited paper Population Aging and Bank Risk Taking, which examines the effects on community banks and credit unions when the average age in their served markets quickly grows older.

Highlights from our discussion:

  • Why this team of European economists are studying American financial institutions, and how their findings are not just relevant in the U.S.

  • How demographic changes are impacting the risk profile and lending practices across the country.

  • A look at the indicators of detailed analysis of loan-to-income ratios provides insights into banks’ lending behaviors, highlighting a propensity for increased risk-taking as populations age.

  • The outsized risks for smaller community Fis.

  • Some potential ways regulators and individual institutions can mitigate the individual and systemic risks to banking.

The full text of the paper can be found here.

For more on Dr. Kabas’s research and to contact him, visit

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This is Behind the Vault: Conversations with Customer-Driven Bankers, the podcast dedicated to empowering CEOs, Presidents, and CMOs in the community banking and credit union industry. In this digital era, your role as a leader in these financial institutions is more crucial than ever. Join us as we explore the stories, strategies, and successes of fellow industry leaders, providing you with actionable insights to drive your institution toward unparalleled success.

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