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Market structure, financial intermediation and riskiness of banks:Evidence from Asia Pacific

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Author Info

  • Wahyoe Soedarmono

    ()
    (Universitas Siswa Bangsa Internasional, Faculty of Business / Sampoerna School of Business - un)

  • Amine Tarazi

    ()
    (LAPE - Laboratoire d'Analyse et de Prospective Economique - Université de Limoges : EA1088 - Institut Sciences de l'Homme et de la Société)

Abstract

From a sample of commercial banks in Asia Pacific over the 1994-2009 period, this study highlights that banks in less competitive markets exhibit lower loan growth and higher instability. Such instability is further followed by a decline in deposit growth, suggesting that Asian banks are also subject to indirect market discipline mechanisms through bank market structure. This study therefore sheds light on the importance of enhancing bank competition to overcome bank risk and strengthen financial intermediation. This study also advocates greater reliance on market discipline to promote bank stability.

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Bibliographic Info

Paper provided by HAL in its series Working Papers with number hal-00947575.

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Date of creation: 2014
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Handle: RePEc:hal:wpaper:hal-00947575

Note: View the original document on HAL open archive server: http://hal-unilim.archives-ouvertes.fr/hal-00947575
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Related research

Keywords: Bank competition; loan growth; risk; market discipline; Asia Pacific;

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