Harming Depositors and Helping Borrowers: The Disparate Impact of Bank Consolidation

• 成果类型: Article
• 署名作者: Park, Kwangwoo; Pennacchi, George
• 署名单位: University of Illinois System; University of Illinois Urbana-Champaign; Korea Advanced Institute of Science & Technology (KAIST)
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhn051
• 发表日期: 2009
• 页码: 1
• 关键词: monetary-policy; COMPETITION; MARKET; transmission; rates; FIRMS; size

摘要

A model of multimarket spatial competition is developed where small, single-market banks compete with large, multimarket banks (LMBs) for retail loans and deposits. Consistent with empirical evidence, LMBs are assumed to set retail interest rates uniformly across markets, have different operating costs, and have access to wholesale funding. If LMBs have significant funding advantages that offset potential loan operating cost disadvantages, then market-extension mergers by LMBs promote loan competition, especially in concentrated markets. However, such mergers reduce retail deposit competition, especially in less concentrated markets. Prior empirical research and our own analysis of retail deposit rates support the model's predictions.