Testing the law of one price in retail banking: An analysis for Colombia using a pair-wise approach

Ana Iregui and Jesus Otero

Borradores de Economia from Banco de la Republica de Colombia

Abstract: We apply a pair-wise approach to test the law of one price for deposit (lending) rates in Colombia. We find that when banks are of different size deposit rates adjust quickly, suggesting a competitive environment. By contrast, lending rates adjust rapidly when banks are of similar size, supporting market segmentation.

Keywords: Law of one price; retail interest rates; Colombia. (search for similar items in EconPapers)
JEL-codes: G21 (search for similar items in EconPapers)
Pages: 11
Date: 2012-09
New Economics Papers: this item is included in nep-ban, nep-com and nep-lam
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https://doi.org/10.32468/be.733 (application/pdf)

Related works:
Journal Article: Testing the law of one price in retail banking: An analysis for Colombia using a pair-wise approach (2013)
Working Paper: Testing the law of one price in retail banking: An analysis for Colombia using a pair-wise approach (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:bdr:borrec:733

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