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Does competition affect bank deposits?

Author

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  • Srivastava, Nikhil
  • Tripe, David
  • Haq, Mamiza
  • Yuen, Mui Kuen

Abstract

This paper examines how monitoring market structure by regulators and competition authorities can support the creation of a stable banking system. Using an unbalanced panel of 16,013 banks across 76 developed and developing countries between 2000 and 2019, our estimates show that competition for deposits increases both deposit growth and retail deposit growth. However, these results vary according to banking system structure. In less concentrated banking markets, interest rates play a major role in attracting deposits compared to highly concentrated markets. Our results hold in response to several robustness tests.

Suggested Citation

  • Srivastava, Nikhil & Tripe, David & Haq, Mamiza & Yuen, Mui Kuen, 2025. "Does competition affect bank deposits?," Finance Research Letters, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:finlet:v:83:y:2025:i:c:s1544612325009687
    DOI: 10.1016/j.frl.2025.107710
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    JEL classification:

    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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