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Concentration And Competitiveness O The Banking Market In Serbia: Current Situation And Possible Future Changes Under The Influence Of Market Consolidation

Author

Listed:
  • Dragan Lončar

    (Faculty of Economics University of Belgrade)

  • Vesna Rajić

    (Faculty of Economics University of Belgrade)

Abstract

Serbia is a bank-centered financial market, which means that the analysis of concentration and competition is important. Currently, the banking market is weakly to moderately concentrated or mildly oligopolistic. In the future, we can expect a consolidation of the banking market in terms of reducing the number of banks and strengthening the market power of the largest banks. Possible channels of consolidation are the sales of the remaining state owned banking package, takeovers between banks and the disappearance of some banks as a result of competitive selection. The paper analyzes the possible scenarios for the future consolidation and their impacts on the competitive dynamics. The authors argue in favor of a positive impact of a more moderate consolidation on competition indicators, but are also warning the regulator to prevent excessive concentration and cartel arrangements.

Suggested Citation

  • Dragan Lončar & Vesna Rajić, 2012. "Concentration And Competitiveness O The Banking Market In Serbia: Current Situation And Possible Future Changes Under The Influence Of Market Consolidation," Serbian Association of Economists Journal, SAE - Serbian Association of Economists, issue 7-8, pages 372-385, December.
    • Handle: RePEc:srb:journl:y:2012:i:7-8:p:372-385
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    File URL: http://www.ses.org.rs/ekonomika-preduzeca/2012-7-8-05.pdf
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    References listed on IDEAS

    as
    1. Deidda, Luca & Fattouh, Bassam, 2005. "Concentration In The Banking Industry And Economic Growth," Macroeconomic Dynamics, Cambridge University Press, vol. 9(2), pages 198-219, April.
    2. Rafael La Porta & Florencio Lopez‐De‐Silanes & Andrei Shleifer, 2002. "Government Ownership of Banks," Journal of Finance, American Finance Association, vol. 57(1), pages 265-301, February.
    3. Nicola Cetorelli, 2001. "Does bank concentration lead to concentration in industrial sectors?," Working Paper Series WP-01-01, Federal Reserve Bank of Chicago.
    4. Bikker, Jacob A. & Haaf, Katharina, 2002. "Competition, concentration and their relationship: An empirical analysis of the banking industry," Journal of Banking & Finance, Elsevier, vol. 26(11), pages 2191-2214, November.
    5. Dragan Ðuričin & Iva Vuksanović, 2012. "Isn’T Output More Important Than Inflation In Impotent Economy: Serbia’S Economic Policies Revision," Serbian Association of Economists Journal, SAE - Serbian Association of Economists, issue 1-2, pages 13-32, February.
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    Cited by:

    1. Bukvić, Rajko, 2020. "Показатељи Тржишне Концентрације И Њихова Дискриминаторна Моћ: Пример Банковног Сектора Србије [Indicators of Market Concentration and Its Discriminatory Power: Example of the Banking Sector of Ser," MPRA Paper 105218, University Library of Munich, Germany, revised 2020.
    2. Bukvić, Rajko, 2022. "Концентрация И Конкуренция В Современном Банковском Секторе Сербии: Перемены И Декомпозиция Индекса Херфиндаля – Хиршмана [Concentration and Competition in Modern Banking Sector of Serbia: Changes ," MPRA Paper 112928, University Library of Munich, Germany, revised 2022.
    3. Radojičić Jelena & Jemović Mirjana & Dragijević Dejan, 2021. "An Analysis of Concentration and Competition in the Banking Sector of the Republic of Serbia," Economic Themes, Sciendo, vol. 59(4), pages 427-444, December.

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    More about this item

    Keywords

    banking market; consolidation; Serbia; concentration; competition;
    All these keywords.

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General

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