Does Loan Portability Promote Competition?

Does Loan Portability Promote Competition?

• Author
• Amanda Miranda Fantinatti
• Co-authors
• Marco Bonomo , Tiago Cavalcanti , Fernando Chertman
• Abstract

• Credit portability has been advocated as an important instrument to promote competition in the banking industry. In 2014, the Brazilian Central Bank (BCB) implemented a regulatory norm to facilitate consumers’ credit portability. We explore the spatial local banking concentration in Brazil to investigate how this institutional change affected local credit markets. We show robust evidence that credit portability reduced interest rates and increased the volume of credit for the types of loans most benefited by the law.

• Keywords
• bank competition, loan portability, household consumption
• Subject Area
• Corporate Finance, Intermediation, and Banking

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