Market Definition and the Analysis of Antitrust in Banking

Antitrust Bulletin, Vol. 42, No. 973, February 1998

Posted: 25 Feb 1998

See all articles by Myron L. Kwast

Myron L. Kwast

Federal Reserve Board - Division of Research & Statistics

John D. Wolken

Board of Governors of the Federal Reserve System - Financial Structure Section

Martha Starr

American University - Department of Economics

Abstract

In antitrust analysis of bank mergers, banking markets are viewed as geographically local, with a "cluster" of products as the relevant product line. This view is criticized as outdated, now that many bank products are offered by non-bank institutions, and financial institutions' operations are increasingly national in scope. This paper reexamines the question of market definition in banking, using two micro data sets uniquely well suited to the task. We find that local depositories remain the dominant supplier of key financial services to households and small businesses, with geographic proximity still important in their institution choice.

JEL Classification: G21, L4

Suggested Citation

Kwast, Myron L. and Wolken, John D. and Starr, Martha, Market Definition and the Analysis of Antitrust in Banking. Antitrust Bulletin, Vol. 42, No. 973, February 1998. Available at SSRN: https://ssrn.com/abstract=45756

Myron L. Kwast (Contact Author)

Federal Reserve Board - Division of Research & Statistics

20th and Constitution Avenue NW
Washington, DC 20551
United States
202-452-2909 (Phone)
202-452-3819 (Fax)

John D. Wolken

Board of Governors of the Federal Reserve System - Financial Structure Section ( email )

20th and C Streets, NW
Washington, DC 20551
202-452-2503 (Phone)

Martha Starr

American University - Department of Economics ( email )

4400 Massachusetts Avenue, N.W.
Washington, DC 20016-8029
United States
202-885-3747 (Phone)

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