The Industrial Organization of Financial Markets

Robert Clark, Jean-François Houde and Jakub Kastl

No 29183, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This chapter discusses recent developments in the literature involving applications of industrial organization methods to finance. We structure our discussion around a simple model of a financial intermediary that concentrates its attention either on (i) the retail market and hence engages in a traditional maturity transformation business by accepting funds that can be used to invest in risky projects (loans), or (ii) the investment business, financing its operations on the “wholesale” market and making markets or investing in higher return riskier projects. Our discussion is centered around the analysis of market structure and competition in each of these markets, focusing in turn on (i) primary and secondary markets for government and corporate debt, (ii) interbank loans, (iii) markets for retail funding, and (iv) credit markets, including mortgages.

JEL-codes: G2 L1 L51 (search for similar items in EconPapers)
Date: 2021-08
New Economics Papers: this item is included in nep-ban, nep-com, nep-cwa, nep-fdg, nep-fmk, nep-ind, nep-isf and nep-reg
Note: IO
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Citations: View citations in EconPapers (7)

Published as Robert Clark, Jean-François Houde, Jakub Kastl, Chapter 15 - The industrial organization of financial markets, Editor(s): Kate Ho, Ali Hortaçsu, Alessandro Lizzeri, Handbook of Industrial Organization, Elsevier, Volume 5, Issue 1, 2021, Pages 427-520

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