Template-Type: ReDIF-Paper 1.0

Author-Name: Elena Deryugina
Author-Email: deryuginaeb@cbr.ru
Author-Workplace-Name: Bank of Russia, Russian Federation

Author-Name: Alexey Ponomarenko
Author-Email: PonomarenkoAA@cbr.ru
Author-Workplace-Name: Bank of Russia, Russian Federation

Author-Name: Andrey Sinyakov
Author-Email: SinyakovAA@cbr.ru
Author-Workplace-Name: Bank of Russia, Russian Federation




Title: Exploring the conjunction between the structures of deposit and credit markets in the digital economy under information asymmetry

Abstract: In the digital economy, customer data becomes particularly valuable. Customer transactions
monitored by banks, payment systems, and retail platforms are a useful source of information to assess
potential borrowers’ credit risk. Thus, a dominant player at a payment or deposit market, behaving
strategically, may influence the characteristics of the lending market.
In this article, we show, within the game-theoretic framework, that such dominance can affect the
market structure, loan pricing, financial inclusion, and credit risk accumulated on banks’ balance sheets.
Our results show that specifics of the digital economy set a new link between structures of deposit and
credit markets. Information asymmetries allow the dominant player to increase its profits at the expense of
the profits gained by other players. At the same time, the accessibility of loans to more risky borrowers
reduces while credit risks of banks’ loan portfolios decline.


Length: 47 pages
Creation-Date: 2021-09
Revision-Date:
Publication-Status:
File-URL: https://cbr.ru/StaticHtml/File/126317/wp-78e.pdf
File-Format: Application/pdf
File-Function:
Number: wps78
Classification-JEL: D43, D82, G21
Keywords:  retail payments, banking, market structure, asymmetric information, customer data
Handle:RePEc:bkr:wpaper:wps78