Market Definition in Banking: Recent Evidence
26 Pages Posted: 4 May 2001
Date Written: February 14, 2001
Antitrust analysis of bank mergers defines banking markets to be geographically local and to consist of the cluster of financial products supplied by commercial banks. This definition is based on assumptions about households' and small businesses' behavior in purchasing banking services. This article utilizes data from the Survey of Consumer Finances to examine how households' use of financial services and institutions changed between 1989 and 1998.
We investigate the extent to which households still focus their purchases of financial services at local depository institutions, as opposed to non-depository or distant institutions, and examine the extent to which purchases are clustered at a single institution. Overall, the results indicate that households continue, to a substantial degree, to obtain certain key asset services, notably checking accounts, at local depository institutions.
Keywords: Market definition, antitrust, banking
JEL Classification: L4, G21, G28
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
The Expanding Geographic Reach of Retail Banking Markets
The Competitive Implications of Multimarket Bank Branching
By Robin A. Prager and Timothy H. Hannan
The Geographic Scope of Retail Deposit Markets
By Robin A. Prager and Erik Heitfield
The Impact of Credit Unions on the Rates Offered for Retail Deposits by Banks and Thrift Institutions
Competitive Advantage: A Study of the Federal Tax Exemption for Credit Unions
By John Tatom
Why Choose a Credit Union? Determinants of Credit Union Deposits