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The effect of the trading activities of banks on systemic risk: does banking industry concentration matter?

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  • Eric Fina Kamani

    (CRIEF Poitiers; LEO Orléans; Université de Tours)

Abstract

In a context where the authorities of the European Banking Union are showing a keen interest in mergers among banks with a view to consolidating the European banking industry, I explore the specific and joint impact of the trading activities of European deposits-taking banks and banking industry concentration on banks' exposure to systemic risk . I find that trading activities increased banks' exposure to systemic risk only in a concentrated banking industry. This paper therefore does not support the encouragement by the European Banking Union authorities for mergers between banks.

Suggested Citation

  • Eric Fina Kamani, 2020. "The effect of the trading activities of banks on systemic risk: does banking industry concentration matter?," Economics Bulletin, AccessEcon, vol. 40(1), pages 542-555.
    • Handle: RePEc:ebl:ecbull:eb-19-00798
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    References listed on IDEAS

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    More about this item

    Keywords

    Trading banks activities; Banking industry concentration; Banks systemic risk exposure;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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