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Market Power In European Banking Sectors

Author

Listed:
  • Francisco Pérez García

    (Instituto Valenciano de Investigaciones Económicas)

  • Joaquín Maudos Villarroya

    (Instituto Valenciano de Investigaciones Económicas)

  • Juan Francisco Fernández de Guevara Radoselovics

    (Instituto Valenciano de Investigaciones Económicas)

Abstract

This study analyses the evolution of market power in the banking sectors of the European Union based on the estimation of Lerner indices. Using a panel of 18,810 observations of the banking industries of Germany, France, Italy, Spain and the United Kingdom during the period 1992-99, the results show substantial differences between countries. The evolution of the Lerner index does not show an increase in the degree of competition within the EU, despite the liberalisation measures implemented in order to create a single banking market. The study discusses the limitations to the interpretation of the Lerner index as an indicator of the degree of competition, and analyses its determining factors. Este trabajo analiza la evolución del poder de mercado en los sectores bancariosde la Unión Europea a partir de la estimación de índices de Lerner. Utilizando un panelde 18,810 observaciones de los sectores bancarios de Alemania, Francia, Italia, Españay Reino Unido durante de periodo 1992-99, los resultados muestran importantesdiferencias por países, siendo los sectores bancarios del Reino Unido e Italia los quepresentan mayores valores del índice. La evolución del índice de Lerner en el periodoanalizado no muestra un aumento en el grado de competencia en el seno de la UE, apesar de las medidas liberalizadoras implementadas con objeto de crear un mercadoúnico bancario. El trabajo discute las limitaciones a la interpretación del índice deLerner como indicador del grado de competencia y analiza sus factores determinantes.A este respecto, la concentración del mercado, el tamaño de las empresas y el riesgoaparecen como variables significativas. En el caso de la concentración, la influencianegativa en el mercado de depósitos y no siendo significativa en el mercado depréstamos permiten rechazar la hipótesis de colusión.

Suggested Citation

  • Francisco Pérez García & Joaquín Maudos Villarroya & Juan Francisco Fernández de Guevara Radoselovics, 2002. "Market Power In European Banking Sectors," Working Papers. Serie EC 2002-05, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  • Handle: RePEc:ivi:wpasec:2002-05
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    References listed on IDEAS

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    More about this item

    Keywords

    poder de mercado; competencia; sectores bancarios europeos. market power; competition; European banking sectors.;
    All these keywords.

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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