Bank Consolidation and the Dynamics of Consumer Loan Interest Rates
This paper analyzes interest rates quoted by individual banks for personal and automobile loans in 10 cities. Personal loan rates are higher in concentrated markets, and banks involved in mergers reduce personal rates relative to their competitors prior to the merger's completion. This is consi...
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| Veröffentlicht in: | The Journal of business (Chicago, Ill.) Ill.), 2005-01, Vol.78 (1), p.99-134 |
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| container_end_page | 134 |
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| container_issue | 1 |
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| container_title | The Journal of business (Chicago, Ill.) |
| container_volume | 78 |
| creator | Kahn, Charles Pennacchi, George Sopranzetti, Ben |
| description | This paper analyzes interest rates quoted by individual banks for personal and automobile loans in 10 cities. Personal loan rates are higher in concentrated markets, and banks involved in mergers reduce personal rates relative to their competitors prior to the merger's completion. This is consistent with mergers changing the size structure of personal loan markets and merger participants' desire to gain regulatory approval. Auto rates are unaffected by local concentration and mergers, suggesting that their market is nationwide. Rates for both loan types respond asymmetrically to changes in Treasury rates, being more sensitive to a rise than a fall. |
| doi_str_mv | 10.1086/426521 |
| format | Article |
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Personal loan rates are higher in concentrated markets, and banks involved in mergers reduce personal rates relative to their competitors prior to the merger's completion. This is consistent with mergers changing the size structure of personal loan markets and merger participants' desire to gain regulatory approval. Auto rates are unaffected by local concentration and mergers, suggesting that their market is nationwide. Rates for both loan types respond asymmetrically to changes in Treasury rates, being more sensitive to a rise than a fall.</description><identifier>ISSN: 0021-9398</identifier><identifier>EISSN: 1537-5374</identifier><identifier>DOI: 10.1086/426521</identifier><identifier>CODEN: JOBUAQ</identifier><language>eng</language><publisher>Chicago: The University of Chicago Press</publisher><subject>Access to credit ; Automobile loans ; Bank acquisitions & mergers ; Bank examinations ; Bank loans ; Bank markets ; Bank rates ; Banking industry ; Banking system ; Banks ; Business studies ; Capital market ; Commercial banks ; Competition ; Consumer credit ; Consumer loans ; Credit market ; Economic concentration ; Economic dynamics ; Empirical research ; Financial economics ; Herfindahl Hirschman index ; Impact analysis ; Interest rates ; Interest rates-deposits ; Interstate banking ; Loan rates ; Loans ; Market shares ; Market structure ; Regulation ; Regulatory approval ; Retail banking ; Small business loans ; Studies ; U.S.A</subject><ispartof>The Journal of business (Chicago, Ill.), 2005-01, Vol.78 (1), p.99-134</ispartof><rights>2005 by The University of Chicago. 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| identifier | ISSN: 0021-9398 |
| ispartof | The Journal of business (Chicago, Ill.), 2005-01, Vol.78 (1), p.99-134 |
| issn | 0021-9398 1537-5374 |
| language | eng |
| recordid | cdi_proquest_miscellaneous_38081132 |
| source | EBSCOhost Business Source Complete; JSTOR Archive Collection A-Z Listing; EZB-FREE-00999 freely available EZB journals |
| subjects | Access to credit Automobile loans Bank acquisitions & mergers Bank examinations Bank loans Bank markets Bank rates Banking industry Banking system Banks Business studies Capital market Commercial banks Competition Consumer credit Consumer loans Credit market Economic concentration Economic dynamics Empirical research Financial economics Herfindahl Hirschman index Impact analysis Interest rates Interest rates-deposits Interstate banking Loan rates Loans Market shares Market structure Regulation Regulatory approval Retail banking Small business loans Studies U.S.A |
| title | Bank Consolidation and the Dynamics of Consumer Loan Interest Rates |
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