TITLE:
The Mexican Banking System and Its’ Oligopsonic-Oligopolistic Structure
AUTHORS:
Carlos Encinas-Ferrer
KEYWORDS:
Oligopsony, Oligopoly, Oligopsony-Oligopoly, Imperfect Competition, Banking System
JOURNAL NAME:
Modern Economy,
Vol.8 No.3,
March
6,
2017
ABSTRACT: The dual figure of the oligopsonic-oligopolistic
enterprise is mainly applied to commercial intermediaries. This dual
personality has a double negative impact on markets of goods: On the one hand,
as an oligopsonic buyer, it reduces demand to producers by lowering the prices
they would sell to be in a competitive market, and, on the other hand, as
oligopolistic sellers, reduce supply, thereby raising prices to final consumers.
In the case of the banking sector, the lack of competition that this dual
figure implies means that the gap between the passive interest rates paid to
the savers and the active rates they charge for lending the same savings are
very high and often lead to negative passive rates that discourage savings and
active rates so high that they discourage productive investment and
consumption.