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

Ana Iregui () and Jesus Otero ()

Economics Letters, 2013, vol. 118, issue 1, 29-32

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 sizes, deposit rates adjust quickly, suggesting a competitive environment. By contrast, lending rates adjust rapidly when banks are of similar sizes, 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)
Date: 2013
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Related works:
Working Paper: Testing the law of one price in retail banking: An analysis for Colombia using a pair-wise approach (2012) Downloads
Working Paper: Testing the law of one price in retail banking: An analysis for Colombia using a pair-wise approach (2012) Downloads
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