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http://hdl.handle.net/10419/38772
  
Title:The economics of regional demarcation in banking PDF Logo
Authors:Raab, Simone
Welzel, Peter
Issue Date:2010
Series/Report no.:Volkswirtschaftliche Diskussionsreihe // Institut für Volkswirtschaftslehre der Universität Augsburg 308
Abstract:Cooperation among savings and cooperative banks was criticized by the European Commission because of potentially anti-competitive effects. In an industrial economics model of banks taking deposits and giving loans we look at regional demarcation as one of such cooperative practices. There are two adjacent markets with one savings or cooperative bank being focused on each one and one private commercial bank serving both. We find that abolishing regional demarcation indeed increases total loan volume. Savings or cooperative banks always improve market performance and do better without regional demarcation which shields the private commercial bank from aggressive competition by these banks.
Subjects:banking
competition
cooperation : non-profit firms
JEL:G21
L41
L44
L33
L13
Document Type:Working Paper
Appears in Collections:Volkswirtschaftliche Diskussionsreihe, Universität Augsburg

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