Keywords: Banks, competition, pricing.
Abstract: In recent years, the number of large, geographically diversified banking organizations
operating in the U.S. has grown. Empirical studies have found that, at least in the case of
deposit interest rates, many of these banks offer the same rate for a given type of account
throughout a state, or, in some cases, a broader geographical area. This phenomenon of
uniform pricing raises questions as to what competitive factors are relevant in explaining
the deposit interest rates offered by large multimarket banks. In this paper, we provide
empirical evidence regarding the determinants of the deposit interest rates offered by
these banking organizations.
Full paper (135 KB PDF)
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Last update: June 30, 2004