Monetary policy and market power in banking
AbstractApplying a spatial competition model to banking, we analyze the effects of the choice of a monetary policy rule by the central bank on banks' market power as measured by the Lerner index. We show that a procyclical monetary policy may reinforce the countercyclical movement of the Lerner index. That is, this measure of competitiveness of the banking sector may vary more over the business cycle due to the monetary policy rule.
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Bibliographic InfoPaper provided by University of Groningen, CCSO Centre for Economic Research in its series CCSO Working Papers with number 200303.
Date of creation: 2003
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- Alin Marius Andrieş & Bogdan Căpraru, 2012. "Competition and efficiency in EU27 banking systems," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 12(1), pages 41-60, July.
- MEREUTA, Cezar & CAPRARU, Bogdan, 2012. "Romanian Banking Competition. A New Structural Approach," Working Papers of National Institute of Economic Research 120722, National Institute of Economic Research.
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