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Volkswirtschaftliche Diskussionsreihe, Universität Augsburg >
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http://hdl.handle.net/10419/38772
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| Title: | | The economics of regional demarcation in banking  |
| 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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