Monopoly banks don't just charge more; they use a 'menu' of products to hide how much they're ripping you off.
March 24, 2026
Original Paper
Rate Channeling Through Deposit Menus
SSRN · 6392898
The Takeaway
We often assume banks just adjust a single base interest rate. In reality, banks in non-competitive markets 'rotate' their menu of offerings, using complex account tiers and screening tools to keep standard rates low while diverging prices across different customer types to maximize profit.
From the abstract
A large literature shows that deposit-rate pass-through is incomplete and weaker in concentrated markets, while a parallel literature shows that large banks often post nearly uniform deposit rates across geographies. This paper argues that both facts survive once deposit pricing is treated as a menu of contracts rather than a single rate. Using proprietary deposit-rate data used by banks for competitive benchmarking, I show that market concentration shapes monetary transmission through rotation