The Disruption of Retail Banking: A Competition Analysis of the Implications for Financial Stability and Monetary Policy

摘要

This article analyses the competition impact of the implementation of two recent regulatoryreforms aimed at boosting competition in retail banking by reducing consumersearch and switching costs and empowering different business models whereby nonbankoperators are able to compete with banks with respect to specific activities suchas the provision of payment services. The article investigates how banks may react strategicallyin order to fend off the resulting competition threats which could undermineretail banks’ reliance on the supply of sight retail deposits as their main source of funding.It also explores how financial regulators, in particular prudential authorities shouldrespond, mindful of the risk for unintended consequences.