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

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.

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Year of publication:	2013
Authors:	Iregui, Ana María ; Otero, Jesús
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 118.2013, 1, p. 29-32
Publisher:	Elsevier
Subject:	Law of one price \| Retail interest rates \| Colombia

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Type of publication:	Article
Classification:	G21 - Banks; Other Depository Institutions; Mortgages
Source:	RePEc - Research Papers in Economics

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