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Viability Of Traditional Banking Services: Evidence From The Regional Level U.S. Banking Industry, Sofia Xinchen Lou

Honors Papers

My study focuses on testing the conduct of banks in their traditional activities, loans and demand deposits provision. The twenty-one year period runs from 1972 to 1992. A relatively recent econometric model is employed. The model takes a set of two-equation system that contains one demand function and one reduced-form supply equation. A parameter that references the deviation in the conduct of banks from the competitive equilibrium level can be estimated using the model. When the parameter has a value that is not significantly different from 0, banks' conduct is said to be competitive. A positive value indicates market power …