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

journal

  • Economics Letters

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.

publication date

  • 2013-1-1

edition

  • 118

keywords

  • Colombia
  • Competitive Environment
  • Deposit Rate
  • Deposits
  • Law of One Price
  • Lending Rate
  • Market Segmentation
  • Retail Banking
  • Testing

International Standard Serial Number (ISSN)

  • 0165-1765

number of pages

  • 4

start page

  • 29

end page

  • 32