An economic assessment of competition within the customer deposit segment in the Maltese retail banking sector

Abstract

The fundamental principle underlying Competition economics is enhancement and promotion of societal welfare through efficient and competitive markets and also the reduction of any anti-competitive trading practices. Implicitly, this results in the achievement of the best optimal outcome for both consumers and producers. On the other hand, the market can result in a market failure if it is characterised by cartels, abusive monopolies and other forms of non-competitive behaviour. As a consequence, market competition assessments are of imperative importance as to ensure that markets are operating efficiently and effectively, resulting in the lowest possible prices and the provision of a wide range of products. Due to the importance of economic considerations in the assessment of competition issues within the European Community the European Commission is increasingly requesting competition authorities to make use of empirical economic tools in their assessment of competition cases.