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Cross-Country Comparisons of Competition and Pricing Power in European Banking

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  • Humphrey David

    ()
    (FLORIDASTATE UNIVERSITY)

  • Carbó Valverde Santiago

    ()
    (UNIVERSITY OF GRANADA FEDERAL RESERVE BANK OF CHICAGO)

  • Maudos Villarroya Joaquín

    ()
    (University of Valencia; Ivie)

  • Molyneux Philip

    ()
    (FLORIDA STATE UNIVERSITY UNIVERSITY OF GRANADA UNIVERSITY OF VALENCIA INSTITUTO VALENCIANO DE INVESTIGACIONES ECONÓMICAS (Ivie) UNIVERSITY OF WALES)

Abstract

Studies of banking competition and competitive behaviour both within and across countries typically utilise only one of the few measures that are available. In trying to assess the relative competitive position of banking markets in 14 European countries, we find that the existing indicators of competition often give conflicting predictions, both across countries and over time. Seeking greater consistency, we attempt to separate bank pricing power from other, non-core, influences embodied in competition measures. While there is some improvement in cross-country consistency, the main result is that our measure of bank pricing power suggests that banking market competitionin Europe may well be stronger than implied by traditional measures and analysis.

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Bibliographic Info

Paper provided by Fundacion BBVA / BBVA Foundation in its series Working Papers with number 201036.

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Length: 48
Date of creation: Jun 2006
Date of revision:
Handle: RePEc:fbb:wpaper:201036

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Keywords: Competition; banking.;

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