Finance and Economics Discussion Series (FEDS)
January 1998
Market Definition and the Analysis of Antitrust in Banking
Myron L. Kwast, Martha Starr-McCluer, and John D. Wolken
Abstract:
In antitrust analysis of bank mergers, banking markets are viewed as geographically local, with a "cluster" of products as the relevant product line. This view is criticized as outdated, now that many bank products are offered by nonbank institutions and financial institutions' operations are increasingly national in scope. This paper reexamines the question of market definition in banking, using two micro data sets uniquely well-suited to the task. We find that local depositories remain the dominant supplier of key financial services to households and small businesses, with geographic proximity still important in their institution choice.
Full paper (350 KB Postscript)Keywords: Market definition, antitrust, banking
PDF: Full Paper
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