Market Definition in Banking: Recent Evidence

26 Pages Posted: 4 May 2001

See all articles by Dean F. Amel

Dean F. Amel

Board of Governors of the Federal Reserve System

Martha Starr

Greylock McKinnon Associates; Independent

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

Amel, Dean F. and Starr, Martha and Starr, Martha, Market Definition in Banking: Recent Evidence (February 14, 2001). Available at SSRN: or

Dean F. Amel

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Martha Starr (Contact Author)

Greylock McKinnon Associates ( email )

1 Memorial Drive, Suite 1410
Cambridge, MA 02142
United States
12025773640 (Phone)


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