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Diversification efficiency and deposit rates

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  • Mark Rhodes

Abstract

There is an increased sophistication in the provision of financial services by UK financial mutuals. This article presents evidence of a more complex process of price setting by these firms. From a theoretical model of the determination of deposit rates, the rate setting behaviour of firms is estimated empirically. Controlling for different service provision and firm characteristics heterogeneous levels of deposit rates are found to be offered by different building societies. This is indicative of differing levels of efficiency achieved by these firms

Suggested Citation

  • Mark Rhodes, 2005. "Diversification efficiency and deposit rates," Applied Financial Economics, Taylor & Francis Journals, vol. 15(13), pages 935-945.
    • Handle: RePEc:taf:apfiec:v:15:y:2005:i:13:p:935-945
    DOI: 10.1080/09603100500187802
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    References listed on IDEAS

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    1. Bauer, Paul W., 1990. "Recent developments in the econometric estimation of frontiers," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 39-56.
    2. Altunbas, Yener & Evans, Lynne & Molyneux, Philip, 2001. "Bank Ownership and Efficiency," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(4), pages 926-954, November.
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