Bank Competition and Stability: Cross-country Heterogeneity (Beck T.H.L., De Jonghe O.G., Schepens G.)

Competition and Market Power Deposit Insurance Regulation Stability&Soundness

Abstract This paper documents a large cross-country variation in the relationship between bank competition and stability and explores market, regulatory and institutional features that can explain this heterogeneity. Combining insights from the competition-stability and regulation-stability literatures, we develop a unified framework to assess how regulation, supervision and other institutional factors may make it more likely that the data favor the charter-value paradigm or the risk-shifting paradigm. We show that an increase in competition will have a larger impact on banks’ risk taking incentives in countries with stricter activity restrictions, more homogenous market structures, more generous deposit insurance and more effective systems of credit information sharing.
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Libref/ Beck T.H.L., De Jonghe O.G., Schepens G. (2011) "Bank Competition and Stability: Cross-country Heterogeneity", Discussion Paper from Tilburg University, Center for Economic Research No 2011-080
© Программирование — Александр Красильников, 2008
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