Competition Buzz:Concentration, Oligopoly and Large Profits in Colombian Banks (2000-2009)
By: Jairo Orlando Villabona National University of Colombia
Towards the end of XXI century, there were major banking crises in the developed world, but this situation did not affect Colombian banks, in contrast, in the decade mentioned reflected excellent results. This research based on the concepts developed and quantitative analysis shows that it is a reality that the Colombian banking is highly concentrated in a real situation of oligopoly that places these entities in a clear dominance over the rest of the economy. This allows, among other things, high profit margins at the expense of productivity of other sectors, despite the need for funding of these.
Worse still, in the case of SMEs and the lower strata the few who have access to credit obtained the highest rates, which places them at a real disadvantage, considering that they don’t’ have the technology to compete against “Bigs Companies” those who get the lowest interest rates, in many cases this leads them to bankruptcy. Interest rates are undoubtedly important in the development of the economy as growth generator tool, since in a scenario where interest rates are low, there is an incentive for firms and households decide to further their investment plans and production, while increasing their willingness to consume, which does not occur in Colombia. The high bank interest rates become an obstacle to industrial development not allowing the leverage needed to make investments.
Full Content: SSRN
Want more news? Subscribe to CPI’s free daily newsletterr for more headlines and updates on antitrust developments around the world.
Featured News
Uruguayan Antitrust Scrutiny Puts Major Meatpacking Deal Between Marfrig and Minerva on Hold
May 19, 2024 by
CPI
Alaska Airlines Seeks Dismissal of Consumer Lawsuit Over $1.9 Billion Hawaiian Airlines Buy
May 19, 2024 by
CPI
Idaho Attorney General Orders Split of Kootenai Health and Syringa Hospital
May 19, 2024 by
CPI
Court Rejects T-Mobile’s Appeal Bid in Antitrust Case Over Sprint Merger
May 19, 2024 by
CPI
Google Requests Judge, Not Jury, to Decide on Antitrust Case
May 19, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Ecosystems
May 9, 2024 by
CPI
Mapping Antitrust onto Digital Ecosystems
May 9, 2024 by
CPI
Ecosystems and Competition Law: A Law and Political Economy Approach
May 9, 2024 by
CPI
Ecosystem Theories of Harm: What is Beyond the Buzzword?
May 9, 2024 by
CPI
Open Ecosystems: Benefits, Challenges, and Implications for Antitrust
May 9, 2024 by
CPI