The bank selection process and market definition in Australia

This paper examines the Australian Competition and Consumer Commission’s (ACCC) approach to market definition in light of bank mergers within the country of Australia. It considers whether or not the ACCC’s approach is consistent with the actual bank selection criteria of a nationwide sample of 2,500 business firms. Empirical evidence reveals that a regulatory approach of defining bank markets based on distinct products may only be serving the interest of large business firms. The interest of small business firms may be better served under the more traditional approach of defining bank markets based on product clusters.