Inferring market power from retail deposit interest rates in the euro area

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dc.contributor Bank of Finland Vajanne, Laura 2014-09-22T07:58:19Z 2014-09-22T07:58:19Z 2009
dc.identifier.isbn 978-952-462-542-5
dc.identifier.isbn 978-952-462-543-2
dc.identifier.issn 1456-6184
dc.description.abstract This paper tests for the existence of market power in banking, using data on demand deposit rates of households and corresponding market rates in five euro area countries. An implicit measure for market power is based on a partial adjustment model that also allows for an asymmetric response of deposit rates to changes in market rates. The period covers the ten years since introduction of the euro. The analysis indicates that banks are exercising major market power within the euro area. In addition to general sluggishness, bank deposit rates reactions are clearly asymmetric: flexible when market rates are decreasing and rigid when rates are increasing. The degree of asymmetric behaviour can be interpreted as a further indication of the market power banks exercise. Despite country differences, a general pattern of interest rate adjustment in demand deposit pricing is observable.
dc.format.extent 31 s.
dc.language.iso eng
dc.relation.ispartofseries Bank of Finland Research Discussion Papers
dc.subject euroalue
dc.subject kilpailu
dc.subject korot
dc.subject pankkitoiminta
dc.subject mallit
dc.subject talletukset
dc.subject Itävalta
dc.subject Saksa
dc.subject Suomi
dc.subject Italia
dc.subject Espanja
dc.subject vähittäispankkitoiminta
dc.subject SP
dc.subject RP
dc.subject markkinavoima
dc.title Inferring market power from retail deposit interest rates in the euro area
dc.type Sarjajulkaisu
dc.identifier.urn URN:NBN:fi:bof-20140807371 Bank of Finland Research Discussion Papers
dc.series.year 2009
dc.series.number 27/2009
dc.series.sortingnumber 0027 8.9.2009

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