IDEAS home Printed from https://ideas.repec.org/a/anr/refeco/v16y2024p233-251.html

Market Power in Banking

Author

Listed:
  • Elena Carletti

    (Centre for Economic Policy Research, London, United Kingdom
    Innocenzo Gasparini Institute for Economic Research (IGIER), Milan, Italy
    BAFFI Centre on Economics, Finance and Regulation, Bocconi University, Milan, Italy)

  • Agnese Leonello

    (European Central Bank, Frankfurt am Main, Germany
    Centre for Economic Policy Research, London, United Kingdom)

  • Robert Marquez

    (Graduate School of Management, University of California, Davis, California, USA)

Abstract

Bank market power, in both loan and deposit markets, has important implications for credit provision and for financial stability. This article discusses these issues through the lens of a simple theoretical framework. On the asset side, banks choose the quality and quantity of loans. On the liability side, they may be subject to depositor runs whenever they offer demandable contracts. This structure allows us to review the literature on the role of market power for credit provision and stability and also highlight the interactions between the two sides of banks’ balance sheets. Our approach identifies relevant channels that deserve further analysis, especially given the rising importance of bank market power for monetary policy transmission and the rise of the digital economy.

Suggested Citation

  • Elena Carletti & Agnese Leonello & Robert Marquez, 2024. "Market Power in Banking," Annual Review of Financial Economics, Annual Reviews, vol. 16(1), pages 233-251, November.
    • Handle: RePEc:anr:refeco:v:16:y:2024:p:233-251
    DOI: 10.1146/annurev-financial-082123-105257
    as

    Download full text from publisher

    File URL: https://doi.org/10.1146/annurev-financial-082123-105257
    Download Restriction: Full text downloads are only available to subscribers. Visit the abstract page for more information.
    File URL: https://libkey.io/10.1146/annurev-financial-082123-105257?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • 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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:anr:refeco:v:16:y:2024:p:233-251. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: http://www.annualreviews.org (email available below). General contact details of provider: http://www.annualreviews.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.