Ultimate Ownership and Bank Competition
87 Pages Posted: 3 Jan 2016 Last revised: 8 May 2019
Date Written: May 4, 2019
We document substantial time-series and cross-sectional variation in branch-level deposit account interest rates, maintenance fees, and fee thresholds, and examine whether variation in bank concentration helps explain variation in these prices. HHI alone is not correlated with any of the outcome variables. A “generalized HHI” (GHHI) capturing both common ownership (the degree to which banks are commonly owned by the same investors) and cross-ownership (the extent to which banks own shares in each other), is strongly correlated with all prices, even when we limit cross-sectional variation in bank ownership to only that predicted by the growth of index funds.
Keywords: Competition, Ownership, Diversification, Pricing, Antitrust, Governance, Product Market, Bank Competition
JEL Classification: L41, L10, G34
Suggested Citation: Suggested Citation