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The Stability-Concentration Relationship in the Brazilian Banking System

Author

Listed:
  • Benjamin Miranda Tabak
  • Solange Maria Guerra
  • Eduardo José Araújo Lima
  • Eui Jung Chang

Abstract

In this article the relation between non-performing loans (NPL) of the Brazilian banking system and macroeconomic factors, systemic risk and banking concentration is empirically tested. While evaluating this relation, we use a dynamic specification with fixed effects, using a panel data approach. The empirical results indicate that the banking concentration has a statistically significant impact on NPL, suggesting that more concentrated banking systems may improve financial stability. These results are important for the design of banking regulation policies.

Suggested Citation

  • Benjamin Miranda Tabak & Solange Maria Guerra & Eduardo José Araújo Lima & Eui Jung Chang, 2007. "The Stability-Concentration Relationship in the Brazilian Banking System," Working Papers Series 145, Central Bank of Brazil, Research Department.
  • Handle: RePEc:bcb:wpaper:145
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    References listed on IDEAS

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