The economics of regional demarcation in banking
- 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.
| Author: | Simone RaabGND, Peter WelzelGND |
|---|---|
| URN: | urn:nbn:de:bvb:384-opus4-711194 |
| Frontdoor URL | https://opus.bibliothek.uni-augsburg.de/opus4/71119 |
| Series (Serial Number): | Volkswirtschaftliche Diskussionsreihe (308) |
| Publisher: | Volkswirtschaftliches Institut, Universität Augsburg |
| Place of publication: | Augsburg |
| Type: | Working Paper |
| Language: | English |
| Year of first Publication: | 2010 |
| Publishing Institution: | Universität Augsburg |
| Release Date: | 2020/02/20 |
| Tag: | JEL: G21, L41, L44, L33, L13 |
| Pagenumber: | 27 |
| Note: | Also published in: Schmalenbach Business Review, volume 63 (2011), pages 120–144 ; https://doi.org/10.1007/BF03396814 |
| Institutes: | Wirtschaftswissenschaftliche Fakultät |
| Wirtschaftswissenschaftliche Fakultät / Institut für Volkswirtschaftslehre | |
| Wirtschaftswissenschaftliche Fakultät / Institut für Volkswirtschaftslehre / Lehrstuhl für Ökonomie der Informationsgesellschaft | |
| Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
| Journals: | Volkswirtschaftliche Diskussionsreihe |
| Licence (German): |  Deutsches Urheberrecht |
