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Finance and Economics Discussion Series
Finance and Economics Discussion Series logo links to FEDS home page Multimarket Bank Pricing: An Empirical Investigation of Deposit Interest Rates
Timothy H. Hannan and Robin A. Prager

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.

Keywords: Banks, competition, pricing.

Full paper (135 KB PDF)

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Last update: June 30, 2004