Assessing the competitive conditions in the Italian banking system: some empirical evidence
AbstractIn the wake of European financial market integration, resulting from the elimination of controls on capital movements and the free access given to banks to other domestic markets within the EU, the Italian financial system has undergone a considerable transformation. In the aftermath of these new changes, however, has there been an increase in competition resulting in significant gains for consumers? Or rather, is unification alone, due to imperfections in financial markets, not enough to bring about stronger competition? Utilizing the Rosse-Panzar test, the author analyzes a sample of Italian banks from 1988-96 to evaluate the degree of competition in the industry. The findings suggest that the Italian banking industry operates under conditions of monopolistic competition and that European integration has yet to have a significant impact on industry conduct. However, the Author notes that due to the relative novelty of liberalization its long-term effect can not yet be known. Although the banking industry was far from equilibrium in the years examined, after the initiation of European integration there was a move towards it, however, it has yet to be attained.
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Bibliographic InfoArticle provided by Banca Nazionale del Lavoro in its journal BNL Quarterly Review.
Volume (Year): 51 (1998)
Issue (Month): 205 ()
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Other versions of this item:
- Paolo Coccorese, 1998. "Assessing the competitive conditions in the Italian banking system: some empirical evidence," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 51(205), pages 171-191.
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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