SHOULD BANK BRANSHING BE REGULATED? THEORY AND EMPIRICAL EVIDENCE FORM FOUR EUROPEAN COUNTRIES

Frank A. Schmid

No 268521, Economic Research Papers from University of Warwick - Department of Economics

Abstract: Along with the liberalisation of bank branching, which was pushed ahead in most OECD member countries during the past several decades, the fear of 'overbranched' markets has arisen. In a model of spatial competition, the welfare effects of bank branching regulation are investigated and empirical results are presented from a pooled cross-section time series analysis from four European countries. It is shown that for all observations in the sample, fewer branches would have been socially undesirable. Moreover, the frequently posed hypothesis that a positive relationship exists between the number of branches and the price for financial intermediation is rejected.

Keywords: Agricultural and Food Policy; Financial Economics (search for similar items in EconPapers)
Pages: 28
Date: 1993-01-01
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwarer:268521

DOI: 10.22004/ag.econ.268521

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