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Price Regulation and Tacit Collusion in the Interbank Electronic Bulk and Retail Credit Transfer Services: Thailand's Experience

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  • Deunden Nikomborirak

    (Thailand Development Research Institute)

Abstract

Price control is often perceived as a convenient tool to protect consumers’ interest as it is simple and visible. However, when the state sets a maximum price of a product or service in a potentially competitive market, it may unintentionally undermine competition in the market and may even facilitate tacit price collusion. This paper illustrates such regulatory fallacy in the case of the electronic interbank credit transfer service in Thailand, where the Bank of Thailand sets the maximum rates that a commercial bank may charge its customers. It also provides a follow-up of the central bank's regulatory amendments following the findings of the report.

Suggested Citation

  • Deunden Nikomborirak, 2017. "Price Regulation and Tacit Collusion in the Interbank Electronic Bulk and Retail Credit Transfer Services: Thailand's Experience," Asian Economic Papers, MIT Press, vol. 16(2), pages 143-160, Summer.
    • Handle: RePEc:tpr:asiaec:v:16:y:2017:i:2:p:143-160
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    References listed on IDEAS

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    1. Joe S. Bain, 1951. "Relation of Profit Rate to Industry Concentration: American Manufacturing, 1936–1940," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 65(3), pages 293-324.
    2. Maudos, Joaquín & Solís, Liliana, 2011. "Deregulation, liberalization and consolidation of the Mexican banking system: Effects on competition," Journal of International Money and Finance, Elsevier, vol. 30(2), pages 337-353, March.
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    More about this item

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G00 - Financial Economics - - General - - - General

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