Banking Market Conditions and Deposit Interest Rates

39 Pages Posted: 5 Jan 2004

See all articles by Richard J. Rosen

Richard J. Rosen

Federal Reserve Bank of Chicago - Economic Research

Date Written: November 2003

Abstract

This paper addresses the impact market conditions on bank deposit interest rates. Examining data for 1988-2000, we find that rates are affected by market size structure (defined as the distribution of market shares of banks of different sizes whether or not the market share is achieved entirely in that local market). This is in addition to the effects of market concentration noted in earlier work. We also find large differences between urban and rural markets. In rural areas, changes in market concentration have no effect on deposit rates. These findings have implications for antitrust policy in banking.

Keywords: Banks, Size Structure, Deposits, Interest Rates, Antitrust Policy

JEL Classification: G21, G28, L11, K21

Suggested Citation

Rosen, Richard J., Banking Market Conditions and Deposit Interest Rates (November 2003). Available at SSRN: https://ssrn.com/abstract=473222 or http://dx.doi.org/10.2139/ssrn.473222

Richard J. Rosen (Contact Author)

Federal Reserve Bank of Chicago - Economic Research ( email )

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