Competition, efficiency, and stability in banking

Schaeck, Klaus and Cihák, Martin (2014) Competition, efficiency, and stability in banking. Financial Management, 43 (1). pp. 215-241. ISSN 0046-3892

Full text not available from this repository.

Abstract

We examine the effect of competition on banking stability using a new measure of competition based on the reallocation of profits from inefficient banks to efficient ones. In a sample of European Banks, we find that this measure does capture competition, that competition is stability-enhancing, and that the stability-enhancing effect of competition is greater for healthy banks than for fragile ones. Our results suggest that efficiency is the conduit through which competition contributes to stability and that regulators must condition policy on the health of existing banks.

Item Type:
Journal Article
Journal or Publication Title:
Financial Management
Uncontrolled Keywords:
/dk/atira/pure/subjectarea/asjc/1400/1402
Subjects:
ID Code:
73586
Deposited By:
Deposited On:
14 Apr 2015 10:54
Refereed?:
Yes
Published?:
Published
Last Modified:
22 Oct 2020 02:48