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Tuesday, July 21, 2020 | History

3 edition of Bank competition and financial stability found in the catalog.

Bank competition and financial stability

Allen N. Berger

Bank competition and financial stability

by Allen N. Berger

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Published by World Bank in [Washington, D.C .
Written in English


Edition Notes

StatementAllen N. Berger, Leora F. Klapper, Rima Turk-Ariss.
SeriesPolicy research working paper -- 4696, Policy research working papers (Online) -- 4696.
ContributionsKlapper, Leora., Turk-Ariss, Rima., World Bank.
Classifications
LC ClassificationsHG3881.5.W57
The Physical Object
FormatElectronic resource
ID Numbers
Open LibraryOL23579200M
LC Control Number2009655714

  The theoretical literature gives conflicting predictions on how bank competition should affect financial stability, and dozens of researchers have attempted to evaluate the relationship empirically. We collect estimates of the competition‐stability nexus reported in 31 studies and analyse the literature using meta‐analysis methods. Allen N. Berger & Leora F. Klapper & Rima Turk-Ariss, "Bank competition and financial stability," Chapters, in: Jacob A. Bikker & Laura Spierdijk (ed.), Handbook of Competition in Banking and Finance, chap pages , Edward Elgar Publishing. Handle: RePEc:elg:eechap_

  This timely report on bank competition and financial stability has been prepared fro the G20 workshop on "The New Financial Landscape". The contributors include Adrian Blundell-Wignall, Stephen Lumpkin, Sebastian Schich, and Patrick Slovik. Chapter 1 of the report draws heavily on the deliberations of the OECD Competition : OECD Publishing. Bank competition and financial stability. Allen N. Berger, Leora Klapper and Rima Turk-Ariss Authors registered in the RePEc Author Service: Rima Turk Ariss Chapter 10 in Handbook of Competition in Banking and Finance, , pp from Edward Elgar Publishing. Abstract: Under the traditional “competition–fragility†view, more bank competition erodes market power.

  The book argues that there is a significant trade-off between competition and financial stability, and that it cannot be fully regulated away. If there were no trade-off between competition and financial stability, then competition policy need not be fine-tuned for the banking sector, and banking would be like any other sector. The trade-off between bank competition and financial stability has always been a widely and controversial issue, both among policy makers and academics. This paper empirically re-investigates the.


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Bank competition and financial stability by Allen N. Berger Download PDF EPUB FB2

Xiaoqing Maggie Fu, Yongjia Rebecca Lin, Philip Molyneux. Pages Bank Competition and Financial Stability in Asia Pacific. The impact of bank competition on financial stability remains a widely debated and controversial issue, both among policymakers and academics.

1 The belief that fiercer competition among banks would lead to a more effective banking system initiated a deregulating spiral in the late s and early by:   Jiang et al. () find that increasing bank competition decreases bank opacity and banks disclose more information in competitive markets.

Greater competition may increase bank stability as competition also disciplines banks to increase monitoring and/or improve their selection of borrowers (Diamond, ). Consistent with this, I find that Cited by: The advantages of competition for an efficient and inclusive financial system are strong, and regulatory and supervisory policies should focus on an incentive-compatible environment for banking rather than try to fine-tune market structure or the degree of competition.

We examine the link between bank competition and financial stability using the recent financial crisis as the setting. We utilize variation in banking competition at the state level and find that banks facing less competition are more likely to engage in risky activities, more likely to face regulatory intervention, and more likely to by: Under the alternative "competition-stability" view, more market power in the loan market may result in greater bank risk as the higher interest rates charged to loan customers make it more difficult to repay loans and exacerbate moral hazard and adverse selection problems.

Foreword This report examines the interplay between banking competition and financial stability, taking into account the experiences in the recent global crisis and the policy response to it. Using bank level measures of competition and co-dependence, the authors show a robust positive relationship between bank competition and systemic stability.

Whereas much of the extant literature has focused on the relationship between competition and the absolute level of risk of individual banks, they examine the correlation in the.

Fiordelisi, Franco & Mare, Davide Salvatore, "Competition and financial stability in European cooperative banks," Journal of International Money and Finance, Elsevier, vol.

45(C), pages Amidu, Mohammed, "The effects of the structure of banking market and funding strategy on risk and return," International Review of Financial Analysis, Elsevier, vol.

28(C), pages   Under the traditional “competition–fragility” view, more bank competition erodes market power, decreases profit margins, and results in reduced franchise value that encourages bank risk taking. Under the alternative “competition–stability” view, more market power in the loan market may result in higher bank risk, as the higher interest rates charged to loan customers make it harder.

>> Download the E-book (PDF, Kb) This report examines the interplay between banking competition and financial stability, taking into account the experiences of the recent global crisis and the policy response to date. Policy makers are faced with striking a balance between sometimes conflicting objectives.

The “competition-stability” strand of the literature contends that financial instability increases as the degree of competitiveness is lessened. Banks with market power will earn more rents by charging higher interest rates on business loans. There has been a notable debate in the banking literature on the impact of bank competition on financial stability.

While the dominant view sees a detrimental impact of competition on the. financial system stability to guide policy formulation and implementation. In particular, scholars and policy makers have focused their efforts on the role that bank competition plays in financial system stability as well as bank specific factors, which could impact.

BANK COMPETITION AND FINANCIAL STABILITY OECD Publishing, Book Condition: New. N/A. Ships from the UK. BRAND NEW. Download PDF Bank Competition and Financial Stability Authored by OECD Organisation for Economic Co-operation and Development Released at Filesize: MB Reviews Absolutely essential go through ebook.

It can be rally. Here, bank competition is indexed by the opportunity costs of depositors to invest in the bank, and the opportunity costs of the firm to be financed by the bank. In this model, the relationship between bank competition, financial stability, and welfare becomes complex in a substantial economic.

competition-stability nexus and testing hypotheses explaining it. The paper is structured as follows. The next section briefly recalls the argument about why banks are ‘special’ from a financial stability perspective, describes the three classic areas of competition policy and explains the relative importance of them for the banking sector.

Bank Competition and Financial Stability: Friends or Foes. c b. Tweet Like Share # Shares while cross-country studies point mostly to a positive relationship between competition and stability in the banking system. Where liberalization and unfettered competition have resulted in fragility, this has been mostly the consequence of regulatory.

"This report examines the interplay between banking competition and financial stability, taking into account the experiences in the recent global crisis and the policy response to it. This study replicates Zigraiova and Havranek's () meta‐analysis of banking competition and financial stability.

It performs multiple types of replications: a ‘Reproduction’ replication where Z&H's data and code are verified to reproduce the results of their study; a ‘Repetition’ replication where the studies used by Z&H are independently recoded and then re‐analysed; an.

Complex trade-off between competition and stability • Liberalization without adequate regulation leads to crises. • Average positive association of market power and bank-level stability but with country variation and some indications that an intermediate level of bank competition maximizes bank stability.

Bank Competition and Financial Stability [OECD Organisation for Economic Co-operation and Development] on *FREE* shipping on qualifying offers. This report examines the interplay between banking competition and financial stability. Books; Bank Competition and Financial Stability Bank Competition and Financial Stability This report examines the interplay between banking competition and financial stability, taking into account the experiences in the recent global crisis and the policy response to it.