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Measuring Competition and Stability: Recent Evidence for European Banking

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Author Info

  • Phil Molyneux

    ()
    (Bangor University)

  • Hong Liu

    (Bangor University)

  • John O.S. Wilson

    (University of St Andrews)

Abstract

This paper uses a variety of structural and non-structural measures (including the Lerner index, Rosse-Panzar H-statistic and Profits-Persistence parameters) to gauge competitive conditions in 11 European banking systems over 1997 to 2008. As in Carbo et al (2009) we find that competition measures tend to provide inconsistent results and the measures are statistically unrelated. We also find that our banking sector risk measures (Z-score, loan-loss provisions, variation in ROE and ROA) are unrelated to the various competition measures. This raises doubts about the generality of the findings of previous empirical studies that investigate competition-stability and competition fragility issues.

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Bibliographic Info

Paper provided by Bangor Business School, Prifysgol Bangor University (Cymru / Wales) in its series Working Papers with number 10020.

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Length: 32 pages
Date of creation: Oct 2010
Date of revision:
Handle: RePEc:bng:wpaper:10020

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Related research

Keywords: Competition; European Banking; NEIO; Risk; SCP; Stability;

References

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Citations

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Cited by:
  1. Horst Gischer & Toni Richter, 2014. "Produktivitätsmessung von Banken: die Cost Income Ratio – ein belastbares Performancemaß?," FEMM Working Papers 140008, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
  2. Brämer, Patrick & Gischer, Horst & Richter, Toni & Weiß, Mirko, 2013. "Competition in banks’ lending business and its interference with ECB monetary policy," Journal of International Financial Markets, Institutions and Money, Elsevier, Elsevier, vol. 25(C), pages 144-162.

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