Harming depositors and helping borrowers
Subtitle: the disparate impact of bank consolidation
By: By Kwangwoo Park and George Pennacchi
Contributors: Pennacchi, George Gaetano
Series: Working paper -- WP07-04; Working paper (Federal Reserve Bank of Cleveland : Online) -- WP07-04.
Publisher: Federal Reserve Bank of Cleveland
Published: 2007
Place of publication: Cleveland, Ohio]
Language: eng
Format: [electronic resource] :
Description: "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 have different operating costs, set retail interest rates that are uniform across markets, and have access to wholesale funding.  If LMBs have significant funding advantages that offset any 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"--Federal Reserve Bank of Cleveland web site.
Notes: Title from PDF file as viewed on 10/29/2007.

Includes bibliographical references.

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