Testing the law of one price in retail banking: An analysis for Colombia using a pair-wise approach Academic Article

abstract

  • We apply a pair-wise approach to test the law of one price for deposit (lending) rates in Colombia. We find that when banks are of different sizes, deposit rates adjust quickly, suggesting a competitive environment. By contrast, lending rates adjust rapidly when banks are of similar sizes, supporting market segmentation. © 2012 Elsevier B.V.

publication date

  • 2013/1/1

keywords

  • Colombia
  • Competitive environment
  • Deposit rate
  • Deposits
  • Law of one price
  • Lending
  • Market segmentation
  • Retail banking
  • Testing

International Standard Serial Number (ISSN)

  • 0165-1765

number of pages

  • 4

start page

  • 29

end page

  • 32