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Competition among banks: good or bad?

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Author Info
Nicola Cetorelli

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Abstract

What are the pros and cons of bank competition? This article presents an overview of the most recent research on the economic role of bank competition. Contrary to the received wisdom that competition in the banking industry is necessarily welfare enhancing, theoretical analyses and empirical evidence also identify possible negative economic effects. This broader view offers food for thought for regulators and policymakers.

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File URL: http://www.chicagofed.org/publications/economicperspectives/2001/2qepart4.pdf
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Publisher Info
Article provided by Federal Reserve Bank of Chicago in its journal Economic Perspectives.

Volume (Year): (2001)
Issue (Month): Q II ()
Pages: 38-48
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:fip:fedhep:y:2001:i:qii:p:38-48:n:v.25no.2

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Related research
Keywords: Bank competition;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Nicola Cetorelli & Michele Gambera, 1999. "Banking market structure, financial dependence and growth: international evidence from industry data," Working Paper Series WP-99-8, Federal Reserve Bank of Chicago. [Downloadable!]
    Other versions:
  2. Emilia Bonaccorsi di Patti & Giovanni Dell'Ariccia, 2000. "Bank competition and firm creation," Proceedings, Federal Reserve Bank of Chicago, issue May, pages 132-161.
    Other versions:
  3. Cetorelli, Nicola & Peretto, Pietro F., 2000. "Oligopoly Banking and Capital Accumulation," Working Papers 00-19, Duke University, Department of Economics. [Downloadable!]
    Other versions:
  4. Mark G. Guzman, 1999. "Bank structure, capital accumulation and growth: a simple macroeconomic model," Working Papers 99-07, Federal Reserve Bank of Dallas. [Downloadable!]
  5. Jayaratne, Jith & Strahan, Philip E, 1996. "The Finance-Growth Nexus: Evidence from Bank Branch Deregulation," The Quarterly Journal of Economics, MIT Press, vol. 111(3), pages 639-70, August. [Downloadable!] (restricted)
  6. Emilia Bonaccorsi di Patti & Giovanni Dell & Ariccia#x2019, 2000. "Bank Competition and Firm Creation," Center for Financial Institutions Working Papers 00-20, Wharton School Center for Financial Institutions, University of Pennsylvania. [Downloadable!]
  7. Nicola Cetorelli, 2001. "Does bank concentration lead to concentration in industrial sectors?," Working Paper Series WP-01-01, Federal Reserve Bank of Chicago. [Downloadable!]
    Other versions:
  8. Thomas F. Hellmann & Kevin C. Murdock & Joseph E. Stiglitz, 2000. "Liberalization, Moral Hazard in Banking, and Prudential Regulation: Are Capital Requirements Enough?," American Economic Review, American Economic Association, vol. 90(1), pages 147-165, March. [Downloadable!] (restricted)
  9. Barth, James R. & Caprio, Gerard & Levine, Ross, 2000. "Banking systems around the globe : do regulation and ownership affect the performance and stability?," Policy Research Working Paper Series 2325, The World Bank. [Downloadable!]
  10. Collender, Robert N. & Shaffer, Sherrill, 2003. "Local bank office ownership, deposit control, market structure, and economic growth," Journal of Banking & Finance, Elsevier, vol. 27(1), pages 27-57, January. [Downloadable!] (restricted)
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  11. Giovanni Dell & Ariccia#x2019, 2000. "Learning by Lending, Competition, and Screening Incentives in the Banking Industry," Center for Financial Institutions Working Papers 00-10, Wharton School Center for Financial Institutions, University of Pennsylvania. [Downloadable!]
  12. Bhattacharya Sudipto & Thakor Anjan V., 1993. "Contemporary Banking Theory," Journal of Financial Intermediation, Elsevier, vol. 3(1), pages 2-50, October. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Dorothea Schäfer & Boriss Siliverstovs & Eva Terberger, 2005. "Banking Competition, Good or Bad?: The Case of Promoting Micro and Small Enterprise Finance in Kazakhstan," Discussion Papers of DIW Berlin 479, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  2. Charles W. Calomiris & Thanavut Pornrojnangkool, 2005. "Monopoly-Creating Bank Consolidation? The Merger of Fleet and BankBoston," NBER Working Papers 11351, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Andrea Repetto & Sergio Rodríguez & Rodrigo O. Valdés, 2002. "Bank Lending and Relationship Banking: Evidence from Chilean Firms," Documentos de Trabajo 146, Centro de Economía Aplicada, Universidad de Chile. [Downloadable!]
  4. Michiel van Leuvensteijn & Jacob Bikker & Adrian van Rixtel & Christoffer Kok-Sorensen, 2007. "A new approach to measuring competition in the loan markets of the euro area," DNB Working Papers 143, Netherlands Central Bank, Research Department. [Downloadable!]
    Other versions:
  5. Álvaro García & Andrea Repetto & Sergio Rodríguez & Rodrigo Valdés, 2003. "Concentration, Hold-Up and Information Revelation in Bank Lending: Evidence From Chilean Firms," Working Papers Central Bank of Chile 226, Central Bank of Chile. [Downloadable!]
  6. Mariarosaria Agostino & Francesco Trivieri, 2008. "Banking Competition and SMEs Bank Financing. Evidence from the Italian Provinces," Journal of Industry, Competition and Trade, Springer, vol. 8(1), pages 33-53, March. [Downloadable!] (restricted)
  7. Hainz, Christa, 2007. "The Effect of Bank Competition on the Bank's Incentive to Collateralize," Discussion Papers in Economics 2007, University of Munich, Department of Economics. [Downloadable!]
    Other versions:
  8. Luis Gutiérrez de Rozas, 2007. "Testing for competition in the Spanish banking industry: The Panzar-Rosse approach revisited," Banco de España Working Papers 0726, Banco de España. [Downloadable!]
  9. Beck, Thorsten & Demirguc-Kant, Asl' & Maksimovic, Vojislav, 2003. "Bank competition, financing obstacles, and access to credit," Policy Research Working Paper Series 2996, The World Bank. [Downloadable!]
  10. Christa Hainz, 2008. "Bank competition - When is it Goog?," Discussion Papers 244, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
  11. Batiz-Lazo, Bernardo & Maixe-Altes, J. Carles, 2006. "Organisational change and the computerisation of British and Spanish savings banks, 1965-1985," MPRA Paper 804, University Library of Munich, Germany. [Downloadable!]
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This page was last updated on 2009-11-18.


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