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Testing the law of one price in retail banking : an analysis for Colombia using a pair-wise approach

Ana María
Iregui-Bohórquez
Jesús
Otero
Sábado, 1 Septiembre 2012

We apply a pair-wise approach to test the law of one price for deposit (lending) rates in Colombia. We find that when banks are of different size deposit rates adjust quickly, suggesting a competitive environment. By contrast, lending rates adjust rapidly