US bank competition weaker than thought – St Louis Fed paper
Including off-balance sheet revenues in pricing power measures suggests competition in the US banking sector could be less than previously thought, according to a researcher from the Federal Reserve Bank of St Louis.
In an economic letter, David Wheelock assesses a measure that calculates the degree of a firm’s pricing power, called the Lerner Index. He develops the measure to include the revenues banks generate from off-balance sheet activities.
Using data from the 10 largest US banks from
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