Until the early 1980s, banking was largely a local business, reflecting the limits placed by the states on intra- and interstate branching. At year-end 1977, 20 states allowed statewide branching, and the remaining 30 states placed limits on intrastate However, as the benefits of geo- graphic diversification became better understood, many states began to lift the legal constraints on branching. By mid-1986, 26 states allowed statewide branch banking, while only 9 restricted banks to a unit banking business. By 2002, only 4 states placed any limits on Inter- state banking, which was just beginning in the early 1980s, generally required separately capital- ized banks to be established within a.
