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Endogenous product differentiation in credit markets: What do borrowers pay for?

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  • Kim, Moshe
  • Kristiansen, Eirik Gaard
  • Vale, Bent

Abstract

This paper studies strategies pursued by banks in order to differentiate their services from those of their rivals. In that way competition among banks is softened. More specifically we analyze if the bank size, the banks ability to avoid losses,and its capital ratio can be used as strategic variabl es to make banks different and increase the interest rates banks can charge their borrowers in equilibrium.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Banking & Finance.

Volume (Year): 29 (2005)
Issue (Month): 3 (March)
Pages: 681-699

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Handle: RePEc:eee:jbfina:v:29:y:2005:i:3:p:681-699

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Web page: http://www.elsevier.com/locate/jbf

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