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Assessing competition in the European Union banking sector

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  • Bogdan Capraru
  • Nicoleta-Livia Pintilie

Abstract

The current paper provides new insights on competition degree among 2,024 commercial, cooperative and savings banks from the 28 European Union states during 2005-2015. Bank-level Lerner index, its efficiency-adjusted form and Boone indicator are the computed indices, with total output consisting in loans, customer deposits and securities. The estimates of marginal costs result from solving a Fourier flexible form of translog cost function. The banks included in the sample remain very competitive over time with the commercial and cooperative ones displaying the highest competitiveness. Non-OECD, upper-middle income and Eurozone states have a more competitive banking sector comparing to their counterparts.

Suggested Citation

  • Bogdan Capraru & Nicoleta-Livia Pintilie, 2017. "Assessing competition in the European Union banking sector," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 9(1), pages 007-026, June.
  • Handle: RePEc:rfb:journl:v:09:y:2017:i:1:p:007-026
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