Keywords: Banks, fees, competition
Abstract: This paper reports a systematic examination of the determinants of deposit-related retail
banking fees using a set of survey data that is unusual for its size, specificity, and
sampling properties. The analysis focuses explicitly on six different fees associated with
checking accounts and automated teller machine (ATM) usage. A preliminary analysis
documents that, on average, multimarket banks charge substantially higher fees than do
typically smaller, single-market banks. A more detailed econometric analysis yields
results consistent with predictions of recent models. In particular, it finds that the greater
the presence of multimarket banks in the local market, the higher are the retail deposit
fees of single-market banks (except in highly concentrated markets) and the weaker is the
positive relationship between those fees and market concentration.
Full paper (124 KB PDF)
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Last update: January 4, 2006