## Instructions

This calculator allows users to conduct analysis similar to that presented in the Federal Reserve Bank of Minneapolis Economic Policy Paper (13-3), “Quantifying the Costs of Additional Regulation on Community Banks,” by Ron Feldman, Ken Heinecke and Jason Schmidt. Please review that paper for additional details on the analysis allowed by this calculator.

The underlying data in the calculator come from the quarterly statements of condition and income that commercial banks are required to file with federal regulators (known as “Call Reports”). This calculator contains data on “community” banks, which are defined to have assets less than \$1 billion. The data are for the years 2001 to 2012.

In the calculator, the user can specify four input parameters:

1. Bank asset size cutoffs. To determine how potential regulatory costs might vary across sizes of banks, create groupings of banks based on the asset size of the bank. Create these groups by specifying “asset size cutoffs.” These cutoffs set the asset size of banks to be included in a given group. Specify up to five different asset size cutoffs. For example, to create groupings that include banks with less than \$50 million in assets, banks with assets between \$50 million and \$100 million, banks with assets between \$100 million and \$250 million, banks with assets between \$250 million and \$500 million and banks with assets greater than \$500 million, the asset cutoffs would be 50, 100, 250 and 500. That is, enter the maximum amount of assets for each cohort in millions of dollars (i.e., 50 = 50 million).

2. Number of full-time equivalent employees (FTEs). This calculator quantifies the potential costs of additional regulation on banks by assuming that the costs manifest themselves as additional hiring of staff. The additional staff are measured as FTEs. Enter the number of FTEs hired by each grouping of banks (note: decimals are allowed, i.e., enter 1.5 for one-and-a-half FTEs). Leave input boxes blank to perform the analysis on fewer than five cohorts.

3. Compensation of FTEs. Specify the compensation of the additional FTEs in order to allow for the quantification of the potential regulatory costs. Also specify compensation for hires at rural and urban banks. Enter the amounts in thousands of dollars (i.e., 70 = 70,000). Also note that the costs are measured in constant 2012 dollars and are adjusted dynamically to account for inflation in earlier years.

4. Year on which the analysis is performed. Select any year from 2001 to 2012 to perform the regulatory cost quantification. For example, to measure the impact of the regulatory change on bank data from 2005, enter “2005.”

Once the parameters have been specified, press the “perform calculations” button to see the results of the change.

## Updated Calculator

This version of the regulatory cost calculator contains updated data through Q4 2013. Note that results for the 2001-2012 period are slightly different due to revisions to the call report data and seasonal adjustment of the CPI.

Note: Click the Enable Content or Enable Macros button when the file opens to allow the calculator to appear.

## Original Calculator

This version of the regulatory cost calculator contains data from 2000-2012 and corresponds to Economic Policy Paper (13-3), “Quantifying the Costs of Additional Regulation on Community Banks.”