State-owned Banks as Competition Enhancers, or the Grand Illusion
AbstractWe analyze the role of state-ownership in the banking sector from the perspective of competition. Considering both the market for mortgage loans and the market for savings and investment deposits in Switzerland, we test three hypothesis: (i) Is the conduct followed by the state-owned 'cantonal banks' consistent with marginal cost pricing? (ii) Do cantonal banks charge and/or offer relatively customer friendly interest rates? And (iii) is competition intensified by the conduct and presence of cantonal banks. Based on a detailed database containing information at he individual bank level over the 1996-2002 period, the answer is: 'No'.
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Bibliographic InfoPaper provided by EconWPA in its series Industrial Organization with number 0407003.
Length: 39 pages
Date of creation: 09 Jul 2004
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Note: Type of Document - pdf; pages: 39
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Competition; Banking; State-ownership; Switzerland; Cantonal banks;
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- L - Industrial Organization
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"Do Public Banks have a Competitive Advantage?,"
SFB 649 Discussion Papers
SFB649DP2008-010, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
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