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

Ana María Iregui, Jesús Otero

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

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.

Original languageEnglish (US)
Pages (from-to)29-32
Number of pages4
JournalEconomics Letters
Volume118
Issue number1
DOIs
StatePublished - Jan 2013

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

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