We examine the consequences of imposing higher capital requirements on banks (as under Basel III or, recently, in the case of large banks in the European context) for bank dynamics in complying with the new standards and for the long-term effects on bank lending rates and the demand for bank...

This paper examines the transmission of productivity differences among banks and of industry productivity growth over time to lower (higher) interest rates of loans (deposits) and higher customer accessibility to bank services. For this purpose, it models spatial competition in retail banking...