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Price interactions in the Russian credit market: Who is fighting whom and when do banks facilitate collusion?
https://doi.org/10.32609/0042-8736-2017-4-79-99
Abstract
This paper analyzes how banks react on the interest rate policy of their rivals when the industry-wide price competition is strengthening over different phases of business cycle in both retail and corporate segments of credit market in Russia. Our estimations, based on the models proposed in the literature on New Industrial Empirical Organization (NIEO), show that price wars are taking place from time to time in the retail as well as in the corporate segments of Russian credit market; more often - in periods of macroeconomic crisis, and are started by the banks from the top-30 group (in terms of assets, excluding Sberbank), the most warlike group within the Russian banking system. During the non-crisis periods banks are turning to facilitate collusions. The retail segment of credit market appears to be significantly more competitive as compared to the corporate one.
Keywords
banks,
retail credit market,
corporate credit market,
price competition,
interest rate,
price wars,
collusion
JEL: C23; D22; D43; G21; G28
About the Author
M. Mamonov
National Research University Higher School of Economics; Center for Macroeconomic Analysis and Short-Term Forecasting, Institute of Economic Forecasting, RAS
Russian Federation
Russian Federation
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For citations:
Mamonov M. Price interactions in the Russian credit market: Who is fighting whom and when do banks facilitate collusion? Voprosy Ekonomiki. 2017;(4):79-99. (In Russ.) https://doi.org/10.32609/0042-8736-2017-4-79-99
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