Ultimate Ownership and Bank Competition

87 Pages Posted: 3 Jan 2016 Last revised: 8 May 2019

See all articles by José Azar

José Azar

University of Navarra, IESE Business School; CEPR

Sahil Raina

University of Alberta - School of Business

Martin C. Schmalz

CEPR; University of Oxford - Finance; CESifo; European Corporate Governance Institute (ECGI)

Date Written: May 4, 2019


We document substantial time-series and cross-sectional variation in branch-level deposit account interest rates, maintenance fees, and fee thresholds, and examine whether variation in bank concentration helps explain variation in these prices. HHI alone is not correlated with any of the outcome variables. A “generalized HHI” (GHHI) capturing both common ownership (the degree to which banks are commonly owned by the same investors) and cross-ownership (the extent to which banks own shares in each other), is strongly correlated with all prices, even when we limit cross-sectional variation in bank ownership to only that predicted by the growth of index funds.

Keywords: Competition, Ownership, Diversification, Pricing, Antitrust, Governance, Product Market, Bank Competition

JEL Classification: L41, L10, G34

Suggested Citation

Azar, José and Raina, Sahil and Schmalz, Martin C. and Schmalz, Martin C., Ultimate Ownership and Bank Competition (May 4, 2019). Available at SSRN: https://ssrn.com/abstract=2710252 or http://dx.doi.org/10.2139/ssrn.2710252

José Azar (Contact Author)

University of Navarra, IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034

CEPR ( email )

United Kingdom

HOME PAGE: http://https://sites.google.com/site/joseazar/

Sahil Raina

University of Alberta - School of Business ( email )

2-32B Business Building
Edmonton, Alberta T6G 2R6

HOME PAGE: http://sites.ualberta.ca/~sraina/

Martin C. Schmalz

CEPR ( email )

United Kingdom

University of Oxford - Finance ( email )

United States

CESifo ( email )

Poschinger Str. 5
Munich, DE-81679

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

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