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Competition And Bank Risk: The Role Of Securitization And Bank Capital

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Author Info

  • Yener Altunbas

    ()
    (Bangor University)

  • Michiel van Leuvensteijn

    (APG)

  • David Marques-Ibanez

    (European Central Bank)

Abstract

We find that the increased use of securitization activity in the banking sector augmented the effect of competition on realized bank risk during the 2007-2009 crisis. Our results suggest that securitization by itself does not lead to augmented risk while higher levels of capital do not buffer the impact of competition on realized risk. It follows that cooperation between supervisory and competition authorities would be beneficial when acting on the financial stability implications of financial innovation and the effects of bank capital regulation.

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File URL: http://www.bangor.ac.uk/business/research/documents/BBSWP13005.pdf
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Bibliographic Info

Paper provided by Bangor Business School, Prifysgol Bangor University (Cymru / Wales) in its series Working Papers with number 13005.

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Length: 15 pages
Date of creation: Oct 2013
Date of revision:
Handle: RePEc:bng:wpaper:13005

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Phone: +44 (0) 1248 383648
Web page: http://www.bangor.ac.uk/business/research/
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Keywords: securitization; competition; bank risk;

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