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Consolidation and Market Structure in Emerging Market Banking Systems

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  • Gaston Gelos
  • Jorge Roldos

Abstract

This paper examines the evolution of market structure in emerging market banking systems during the 1990s. While significant bank consolidation has been taking place in these countries, reflected in a sharp decline in the number of banks, this process has not systematically been associated with increased concentration as measured by standard indices. Moreover, econometric estimates based on the Panzar-Rosse (1987) methodology suggest that, overall, markets have not become less competitive in a sample of eight European and Latin American countries. Lowering barriers to entry, by doing such things as allowing increased participation of foreign banks, appears to have prevented a decline in competitive pressures associated with consolidation.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 02/186.

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Length: 30
Date of creation: 01 Nov 2002
Date of revision:
Handle: RePEc:imf:imfwpa:02/186

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Keywords: Banking; Emerging markets; competition; monopolistic competition; banking systems; monopoly; merger; banking system; bank consolidation; perfect competition; market concentration; mergers; banking sector; bank entry; banking industry; bank competition; foreign competition; banking markets; banking crisis; intensity of competition; prudential regulation; banking sectors; banking market; bankers; universal banking; banking activities; banking industries; bank accounts; lower concentration; national bank; bankrupt; banking law; competitive equilibrium; merger activity; regulatory authorities; bank assets; banking assets; bank lending; degree of competition; banking regulation; banking system assets; bank market; subordinated debt; holding company; competitive structure; bank activities; bank structure; banking institutions; bank negara malaysia; higher concentration; bank deposits; deposit insurance;

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  18. J.A. Bikker & J.M. Groeneveld, 1998. "Competition and Concentration in the EU Banking Industry," Research Series Supervision (discontinued) 8, Netherlands Central Bank, Directorate Supervision.
  19. Barajas, Adolfo & Steiner, Roberto & Salazar, Natalia, 2000. "The impact of liberalization and foreign investment in Colombia's financial sector," Journal of Development Economics, Elsevier, vol. 63(1), pages 157-196, October.
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