Is commercial banking a distinct line of commerce?
Author InfoLynn W. Woosley B. Frank King Michael S. Padhi Abstract In analyzing the competitive impacts of bank consolidations, banking agencies and the U.S. Department of Justice tend to rely on the assumption that the market for bank services is local and is for services offered only by banks. This approach allows analysts to merge all products and services into a “cluster of services” for analysis of competition. Increases in types and locations of competitors have cast doubt on whether a cluster of services exists, however. ; These changes have induced the U.S. Department of Justice to do separate analyses of small business lending when analyzing consolidations. This article compares measures of market concentration across deposit and small business loan products to answer two questions crucial for antitrust analysis: Are small business lending markets local, and are deposits an adequate proxy for small business loans? For their analysis, the authors use new information provided by
