Assuming foreign bank with limited fund and local bank with unlimited fund, this paper constructs the credit competition between two banks, the result shows that: when the fund of foreign bank is relatively enough, two banks compete for low-risk customers, all low-risk customers can get loans; When the fund of foreign bank is not enough, two banks monopolize their own familiar low-risk customers, parts of the low-risk customers can't get loans, credit rationing appears. Moreover, the profit of foreign bank is not strictly monotonic with its fund, that is to say, when foreign bank has less fund, the profit of foreign bank may stay the same.
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