The Industrial Organization of Financial Markets

99 Pages Posted: 30 Aug 2021 Last revised: 28 Sep 2022

See all articles by Robert Clark

Robert Clark

Queen's University

Jean-Francois Houde

University of Wisconsin - Madison - Department of Economics

Jakub Kastl

Princeton University

Date Written: August 2021


This chapter discusses recent developments in the literature involving applications of industrial organization methods to finance. We structure our discussion around a simple model of a financial intermediary that concentrates its attention either on (i) the retail market and hence engages in a traditional maturity transformation business by accepting funds that can be used to invest in risky projects (loans), or (ii) the investment business, financing its operations on the “wholesale” market and making markets or investing in higher return riskier projects. Our discussion is centered around the analysis of market structure and competition in each of these markets, focusing in turn on (i) primary and secondary markets for government and corporate debt, (ii) interbank loans, (iii) markets for retail funding, and (iv) credit markets, including mortgages.

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Suggested Citation

Clark, Robert and Houde, Jean-Francois and Kastl, Jakub, The Industrial Organization of Financial Markets (August 2021). NBER Working Paper No. w29183, Available at SSRN:

Robert Clark (Contact Author)

Queen's University ( email )

Kingston, Ontario K7L 3N6

Jean-Francois Houde

University of Wisconsin - Madison - Department of Economics ( email )

William H. Sewell Social Science Building
1180 Observatory Drive
Madison, WI 53706-1393
United States

Jakub Kastl

Princeton University

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