Assessing banking competition: an application to the Spanish market for (quality-changing) deposits

Juan Ayuso () and Jorge Martínez ()
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Juan Ayuso: Banco de España
Jorge Martínez: Banco de España

No 623, Working Papers from Banco de España

Abstract: Taking the Spanish market for deposits as a case study we show the importance of properly controlling for the quality of the services provided when assessing the degree of banking competition. While a simple approach based on estimating the price elasticity of the residual supply of deposit funds faced by banks does not reveal any increase in competition, such an increase is clear when the interest rate on deposits is "corrected" according to the behaviour of variables that proxy the quality of the different services embedded in a bank deposit.

Keywords: banking competition; panel data; service quality (search for similar items in EconPapers)
JEL-codes: D40 G21 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2006-09
New Economics Papers: this item is included in nep-ban, nep-com and nep-eec
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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