The influence of product age on pricing decisions: An examination of bank deposit interest rate setting

Robert Anderson, John Ashton () and Robert Hudson

Journal of International Financial Markets, Institutions and Money, 2014, vol. 31, issue C, 216-230

Abstract: Do banks extract rent from depositors who hold older deposit accounts? This study addresses this question using product level data from the UK instant access (branch based) deposit market. In this context, two research questions related to the conditions necessary for differential pricing for existing and new customers are assessed. Specifically whether more mature deposit accounts have lower interest rates and does the newest deposit account in a firm portfolio pay an interest rate premium? Empirical support is provided for both questions, with interest rate setting for new and existing deposit accounts also found to be influenced by firm type.

Keywords: Interest rate setting; Switching; Deposits; UK retail savings market (search for similar items in EconPapers)
JEL-codes: G21 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (8)

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Working Paper: The Influence of Product Age on Pricing Decisions: An examination of bank deposit interest rate setting (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:31:y:2014:i:c:p:216-230

DOI: 10.1016/j.intfin.2014.03.010

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