Research note: pricing behaviour across multiple distribution channels in the UK deposit account market: 1997-2001

Abstract

In this research note the pricing behaviour of UK depository institutions is examined. The study uses daily interest rate data for 186 UK deposit saving accounts over the sample period, 1997-2001, which are distributed through branches and across postal and telephone networks. The relative level and dispersion of interest rates and the frequency and responsiveness of interest rate change are examined for deposit products that are distributed through different distribution channels. Slight and mostly insignificant interest rate differentials are recorded between deposit accounts distributed through branch, postal and telephone channels. Similarly, only small differences are recorded for the dispersion, frequency and responsiveness of interest rate change of deposit products distributed through different distribution channels.

Keywords:

• Distribution Channels
• Interest Rates
• Physical Menu Costs
• Price Change
• Price Responsiveness
• Retail Banking