efficiency of the liquidity insurance that banks' deposit contracts provide to households that are subject to idiosyncratic … liquidity shocks. But in contrast to these approaches we assume spacial monopolistic competition among banks. Since monopoly … rents already. Thus our results suggest that in the bank-dominated financial system of Germany, in which banks intensely …

approach is able to measure competition of bank market segments, such as the loan market, whereas many well-known measures of … ignores differences in bank product quality and design, as well as the attractiveness of innovations. We measure competition …

Diamond and by Fecht, we use a model in which the degree of liquidity insurance offered to households through banks' deposit … not sufficiently restrain monopoly rents already. Thus, our results suggest that in Germany's bank-dominated financial … welfare because it only reduces risk sharing. In contrast, in the U.S. banking system, where there is less competition for …

stronger competition implies significantly lower spreads between bank and market interest rates for most loan market products … bank interest rates, we likewise find that banks tend to price their loans more in accordance with the market in countries … where competitive pressures are stronger. Further, where loan market competition is stronger, we observe larger bank spreads …