Bank Competition and Stability: Cross-country Heterogeneity (Revised version of CentER DP 2011-080)
AbstractAbstract: This paper documents large cross-country variation in the relationship between bank competition and bank stability and explores market, regulatory and institutional features that can explain this variation. We show that an increase in competition will have a larger impact on banks’ fragility in countries with stricter activity restrictions, lower systemic fragility, better developed stock exchanges, more generous deposit insurance and more effective systems of credit information sharing. The effects are economically large and thus have important repercussions for the current regulatory reform debate.
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Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2012-085.
Date of creation: 2012
Date of revision:
Contact details of provider:
Web page: http://center.uvt.nl
Competition; Stability; Banking; Herding; Deposit Insurance; Information Sharing; Risk Shifting;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-11-11 (All new papers)
- NEP-BAN-2012-11-11 (Banking)
- NEP-CBA-2012-11-11 (Central Banking)
- NEP-COM-2012-11-11 (Industrial Competition)
- NEP-IAS-2012-11-11 (Insurance Economics)
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