Competition and Stability in Banking

Competition and Stability in Banking

The banking sector in Europe is subject to continuous change.

Author: Marcel Canoy


ISBN: IND:30000082631064

Category: Banks and banking

Page: 161

View: 371

The banking sector in Europe is subject to continuous change. Banks are taking up new types of business in order to diversify their risk; new players such as insurance companies, credit card providers, and non-financial companies enter market segments which used to be the territory of commercial banks; and banks increasingly operate outside their home country or merge with cross-border partners. These developments, triggered by new information technology, disintermediation, deregulation, and the arrival of the Euro, change the landscape in the banking sector and raise a number of policy issues. What are the implications for competition among banks? How can financial stability best be maintained in this changing market? Is there a conflict between increasing competition among banks and stability?
Categories: Banks and banking

Competition and Stability in Banking

Competition and Stability in Banking

"Can the banking industry be both stable and openly competitive? Can we have it all? This is the fundamental question addressed in Competition and Stability in Banking.

Author: Xavier Vives

Publisher: Princeton University Press

ISBN: 9780691210032

Category: Business & Economics

Page: 344

View: 270

A distinguished economist examines competition, regulation, and stability in today's global banks Does too much competition in banking hurt society? What policies can best protect and stabilize banking without stifling it? Institutional responses to such questions have evolved over time, from interventionist regulatory control after the Great Depression to the liberalization policies that started in the United States in the 1970s. The global financial crisis of 2007–2009, which originated from an oversupply of credit, once again raised questions about excessive banking competition and what should be done about it. Competition and Stability in Banking addresses the critical relationships between competition, regulation, and stability, and the implications of coordinating banking regulations with competition policies. Xavier Vives argues that while competition is not responsible for fragility in banking, there are trade-offs between competition and stability. Well-designed regulations would alleviate these trade-offs but not eliminate them, and the specificity of competition in banking should be accounted for. Vives argues that regulation and competition policy should be coordinated, with tighter prudential requirements in more competitive situations, but he also shows that supervisory and competition authorities should stand separate from each other, each pursuing its own objective. Vives reviews the theory and empirics of banking competition, drawing on up-to-date analysis that incorporates the characteristics of modern market-based banking, and he looks at regulation, competition policies, and crisis interventions in Europe and the United States, as well as in emerging economies. Focusing on why banking competition policies are necessary, Competition and Stability in Banking examines regulation's impact on the industry's efficiency and effectiveness.
Categories: Business & Economics

Handbook of Competition in Banking and Finance

Handbook of Competition in Banking and Finance

However, this is easier said than done. The goal of this Handbook is to provide a collection of state-of-the-art chapters to address this issue.

Author: Jacob A. Bikker

Publisher: Edward Elgar Publishing

ISBN: 9781785363306


Page: 424

View: 933

For academics, regulators and policymaker alike, it is crucial to measure financial sector competition by means of reliable, well-established methods. However, this is easier said than done. The goal of this Handbook is to provide a collection of state-of-the-art chapters to address this issue. The book consists of four parts, the first of which discusses the characteristics of various measures of financial sector competition. The second part includes several empirical studies on the level of, and trends in, competition across countries. The third part deals with the spillovers of market power to other sectors and the economy as a whole. Finally, the fourth part considers competition in banking submarkets and subsectors.

Handbook of Financial Intermediation and Banking

Handbook of Financial Intermediation and Banking

SECTION 6 Competition and Regulation in Banking Overview by Xavier Vives
IESE Business School 14 Competition ... This section takes stock of what we
know about the relationship of competition, regulation, and stability in banking
from the ...

Author: Anjan V. Thakor

Publisher: Elsevier

ISBN: 0080559921

Category: Business & Economics

Page: 608

View: 127

The growth of financial intermediation research has yielded a host of questions that have pushed "design" issues to the fore even as the boundary between financial intermediation and corporate finance has blurred. This volume presents review articles on six major topics that are connected by information-theoretic tools and characterized by valuable perspectives and important questions for future research. Touching upon a wide range of issues pertaining to the designs of securities, institutions, trading mechanisms and markets, industry structure, and regulation, this volume will encourage bold new efforts to shape financial intermediaries in the future. * Original review articles offer valuable perspectives on research issues appearing in top journals * Twenty articles are grouped by six major topics, together defining the leading research edge of financial intermediation * Corporate finance researchers will find affinities in the tools, methods, and conclusions featured in these articles
Categories: Business & Economics

Monetary History Exchange Rates and Financial Markets

Monetary History  Exchange Rates and Financial Markets

8. Competition. and. stability: what's. special. about. banking? Elena. Carletti. and
. Philipp. Hartmann*. 1. INTRODUCTION. The speciality of the banking system
from the perspective of stability is a widely recognised idea (see for example ...

Author: Charles Albert Eric Goodhart

Publisher: Edward Elgar Publishing

ISBN: 9781781950784

Category: Business & Economics

Page: 281

View: 361

Monetary History, Exchange Rates and Financial Markets is an impressive collection of original papers in honour of Charles Goodhart's outstanding contribution to monetary economics and policy. Charles Goodhart has written extensively on many of these topics and has become synonymous with his field; the chapters within this book offer a summary of current thinking on his own research subjects and include perspectives on controversies surrounding them.
Categories: Business & Economics

Bank Competition and Financial Stability

Bank Competition and Financial Stability

Section 1.2 defines what is meant by competition in banking. Section 1.3 looks at
issues that relate to improving competition without necessarily harming financial
stability. The focus here is on issues related to barriers to entry. Section 1.4 sets ...

Author: OECD

Publisher: OECD Publishing

ISBN: 9789264120563


Page: 84

View: 577

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. The report has been prepared by members of the Directorate of ...

The Oxford Handbook of Banking Second Edition

The Oxford Handbook of Banking  Second Edition

However, it is only recently that researchers have sought to establish and
understand links between competition and bank risk on the one hand, and
financial stability on the other. One school of thought argues that less competitive
banking ...

Author: Allen N. Berger

Publisher: OUP Oxford

ISBN: 9780191002199

Category: Business & Economics

Page: 1040

View: 850

The Oxford Handbook of Banking, Second Edition provides an overview and analysis of developments and research in banking written by leading researchers in the field. This handbook will appeal to graduate students of economics, banking and finance, academics, practitioners, regulators, and policy makers. Consequently, the book strikes a balance between abstract theory, empirical analysis, and practitioner, and policy-related material. The Handbook is split into five parts. Part I, The Theory of Banking, examines the role of banks in the wider financial system, why banks exist, how they function, and their corporate governance and risk management practices. Part II deals with Bank Operations and Performance. A range of issues are covered including bank performance, financial innovation, and technological change. Aspects relating to small business, consumer, and mortgage lending are analysed together with securitization, shadow banking, and payment systems. Part III entitled Regulatory and Policy Perspectives discusses central banking, monetary policy transmission, market discipline, and prudential regulation and supervision. Part IV of the book covers various Macroeconomic Perspectives in Banking. This part includes a discussion of systemic risk and banking and sovereign crises, the role of the state in finance and development as well as how banks influence real economic activity. The final Part V examines International Differences in Banking Structures and Environments. This part of the Handbook examines banking systems in the United States, European Union, Japan, Africa, Transition countries, and the developing nations of Asia and Latin America.
Categories: Business & Economics

Summary of the Thesis Essays on Financial Stability and Corporate Finance

Summary of the Thesis   Essays on Financial Stability and Corporate Finance

We argue that the presence of stakeholder banks influences competition, welfare
and stability. In particular, we are concerned with the conse- quences of
transforming a commercial bank into a stakeholder bank on the banks' risk taking

Author: Mónica López-Puertas Lamy

Publisher: Ed. Universidad de Cantabria

ISBN: 9788486116811


Page: 32

View: 845

El principal objetivo de este trabajo consiste en analizar los efectos que la estructura de propiedad bancaria tiene sobre la toma de riesgos, a nivel microeconómico y sobre el riesgo sistémico, a nivel macroeconómico. Para ello se desarrolla un modelo de competencia oligopolística y se analizan las propiedades del equilibrio de mercado en términos de beneficios, cuota de mercado y micro y macro estabilidad financiera cuando un banco comercial, maximizador de beneficios, compite contra un banco no orientado hacia los beneficios (stakeholder bank). Los resultados teóricos son validados empíricamente usando datos bancarios de 72 países durante el periodo 1997-2007. Concretamente se muestra que a) los stakeholder banks son menos arriesgados que los bancos comerciales, b) cualquier banco es más arriesgado cuando compite contra un stakeholder bank en lugar de contra un banco comercial, c) a nivel sistémico la presencia de stakeholder banks aumenta la estabilidad financiera, d) el efecto de la regulación bancaria y de la competencia en la toma de riesgos depende de la estructura de propiedad del banco, e) la concentración accionarial incrementa el riesgo bancario, f) el diseño de los incentivos gerenciales tiene un efecto muy significativo sobre la toma de riesgos bancarios.

The Oxford Handbook of Capitalism

The Oxford Handbook of Capitalism

This “charter value” view of banking sees banks as choosing the risk of their
asset portfolio.50 In a more competitive ... capital cushions, and therefore fewer
incentives to take aggressive risks, with positive repercussions for financial

Author: Dennis C. Mueller

Publisher: Oxford University Press

ISBN: 9780199942596

Category: Political Science

Page: 576

View: 981

The financial crisis that began in 2008 and its lingering aftermath have caused many intellectuals and politicians to question the virtues of capitalist systems. The 19 original essays in this Handbook, written by leading scholars from Asia, North America, and Europe, analyze both the strengths and weaknesses of capitalist systems. The volume opens with essays on the historical and legal origins of capitalism. These are followed by chapters describing the nature, institutions, and advantages of capitalism: entrepreneurship, innovation, property rights, contracts, capital markets, and the modern corporation. The next set of chapters discusses the problems that can arise in capitalist systems including monopoly, principal agent problems, financial bubbles, excessive managerial compensation, and empire building through wealth-destroying mergers. Two subsequent essays examine in detail the properties of the "Asian model" of capitalism as exemplified by Japan and South Korea, and capitalist systems where ownership and control are largely separated as in the United States and United Kingdom. The handbook concludes with an essay on capitalism in the 21st century by Nobel Prize winner Edmund Phelps.
Categories: Political Science

Research Handbook on International Banking and Governance

Research Handbook on International Banking and Governance

The second, referred to as the competition-stability view, argues that competition
leads to less fragility. The argument goes that in concentrated banking systems
with low levels of competition, the market power ofincumbent banks results in ...

Author: James R. Barth

Publisher: Edward Elgar Publishing

ISBN: 9781849806107

Category: Business & Economics

Page: 738

View: 624

The recent financial crisis has stimulated much debate on the governance of financial institutions, as well as research on the effects of governance arrangements on risk-taking, performance and financial institutions more generally. Furthermore, researchers are asking how regulation, legislation, politics and other factors influence the governance of financial institutions and their behavior in different dimensions. The specially commissioned contributions featured in this timely Handbook confront these complex issues. The contributors – top international scholars from finance, law and business – explore the role of governance, both internal and external, in explaining risk-taking and other aspects of the behavior of financial institutions. Additionally, they discuss market and policy features affecting objectives and quality of governance. The chapters provide in-depth analysis of factors such as: ownership, efficiency and stability; market discipline; compensation and performance; social responsibility; and governance in non-bank financial institutions. Only through this kind of rigorous examination can one hope to implement the financial reforms necessary and sufficient to reduce the likelihood and severity of future crises. Bringing the reader to the frontier of research on governance of financial institutions, this volume is sure to inspire future research in scholars and students of financial institutions, governance and banking as well as all those involved with private financial institutions and public regulatory and supervisory authorities.
Categories: Business & Economics

Competition in the Investment Banking Industry

Competition in the Investment Banking Industry

The reverse is a more controversial proposition ; stability of bank - client
relationships need not signal strongly that competition is weak . 5. The Matching
of Banks and Clients 1. For those with a quantitative bent , a certain amount of
comment ...

Author: Samuel L. Hayes

Publisher: Harvard University Press

ISBN: 0674154150

Category: Business & Economics

Page: 177

View: 469

Investment banks play a critically important role in channeling capital from investors to corporations. Not only do they float and distribute new corporate securities, they also assist companies in the private placement of securities, arrange mergers and acquisitions, devise specialized financing, and provide other corporate financial services. After sketching the history and evolution of investment banking, the authors describe the structure of the industry, focusing on the competitive forces at work within it today. They explore patterns of concentration and analyze the strategic and economic factors that underlie those patterns. The authors directly examine the pairing up of investment banks with their corporate clients. They show that the market is sharply segmented, with banks and corporate clients being matched in roughly rank order, the most prestigious banks with the largest, most powerful clients, and so on. Vigorous competition occurs within each segment, but much less between them. With the industry now confronting a changing regulatory environment, a growing tendency of clients to arrange their own financing, and increasing competition both from within and from commercial banks and foreign institutions, Competition in the Investment Banking Industry is essential reading for anyone interested in the future of investment banking.
Categories: Business & Economics

Financial Dependence Banking Sector Competition and Economic Growth

Financial Dependence  Banking Sector Competition  and Economic Growth

... degree of competition in the financial sector can affect the efficiency of the
production of services, the quality of products, and the degree of innovation in
that sector. Specific to the financial sector is the link between competition and
stability ...

Author: Stijn Claessens

Publisher: World Bank Publications


Category: Banks and banking

Page: 48

View: 626

"The relationships among competition in the financial sector, access of firms to external financing, and associated economic growth are ambiguous in theory. Moreover, measuring competition in the financial sector can be complex. In this paper Claessens and Laeven first estimate for 16 countries a measure of banking system competition based on industrial organization theory. They then relate this competition measure to growth of industries and find that greater competition in countries' banking systems allows financially dependent industries to grow faster. These results are robust under a variety of tests. The results suggest that the degree of competition is an important aspect of financial sector funding. This paper--a product of the Financial Sector Operations and Policy Department--is part of a larger effort in the department to study competition in banking"--World Bank web site.
Categories: Banks and banking

Czech Yearbook of International Law Public Policy and Ordre Public 2012

Czech Yearbook of International Law   Public Policy and Ordre Public   2012

Veronika Burketová Abstract | This article presents, with reference to the
development of European financial markets affected by crises, a view on the
relationship between competition among banks and the stability of the banking
system and of ...

Author: Alexander J. Bělohlávek

Publisher: Juris Publishing, Inc.

ISBN: 9781578233564

Category: Criminal justice, Administration of

Page: 344

View: 445

We are proud to present to our readers Czech Yearbook of International Law 2012, Volume 3. The overarching topic of this volume, Public Policy and Ordre Public turns its focus to the doctrine which is inherently connected with private international law, which is true only at first glance. The problem of Public Policy and Ordre Public is intertwined more deeply in the national legal orders than virtually any legal branch. However, the platform of private international law through which these doctrines emerge and find its strongest application is in the cross-border traffic of the court and extra-court decisions. In these relationships, the most important differences in understanding the extent and nature of these terms take shape. The third volume of the Czech Yearbook of International Law focuses on the uncovering of national differences and the comparison of such doctrines in a global perspective. CYIL 2012 takes into account the completely different connotations given to both doctrines in the United States and the Common Law countries in continental Europe. Institutions participating in the CYIL Project: Academic institutions within Czech Republic: - Masaryk University (Brno), Faculty of Law, Department of International and European Law. - University of West Bohemia in Pilsen, Faculty of Law, Department of Constitutional Law & Department of International Law. - VŠB-TU Ostrava, Faculty of Economics, Department of Law. - Department of European Law, Department of Commercial Law & Centre for Comparative Law of the Faculty of Law, Charles University. - University College of International and Public Relations Prague. - Institute of State and Law of the Academy of Sciences of the Czech Republic, v.v.i. Non-academic institutions in the Czech Republic - Office of the Government of the Czech Republic, Department of Legislation, Prague. - Arbitration Court attached to the Economic Chamber of the Czech Republic and Agricultural Chamber of the Czech Republic, Prague. - ICC National Committee Czech Republic, Commission on Arbitration, Prague. Institutions outside Czech Republic participating in the CYIL Project: Austria University of Vienna, Department of European, International and Comparative Law, Section for International Law and International Relations. Poland Jagiellonian University in Krakow, Faculty of Law and Administration, Department of Private International Law. Slovak Republic Slovak Academy of Sciences, Institute of State and Law, Bratislava. University of Matej Bel in Banská Bystrica, Faculty of Political Sciences and International Relations, Department of International Affairs and Diplomacy. Trnava University in Trnava, Faculty of Law, Department of Labour Law and Social Security Law.
Categories: Criminal justice, Administration of

Competition Policy in the EU

Competition Policy in the EU

In most countries its regulation dates back to well before the introduction of
competition policy. Given this peculiarity and the idea that competition is
detrimental to stability, competition in the banking sector was basically
suppressed until ...

Author: Xavier Vives

Publisher: OUP Oxford

ISBN: 9780191570605

Category: Business & Economics

Page: 400

View: 479

A volume that takes stock and looks ahead on the development and implementation of competition policy in the European Union fifty years after the Treaty of Rome. Competition policy has emerged as a key policy in the EU with competition acting as the driving force for economic efficiency and the welfare of citizens. Case law has been established to control and prevent anti-competitve behavior, state aid control has consolidated and evolved towards a more economic approach, and the authority of the EC and the judicial review of the Court of the First Instance (CFI) and the European Court of Justice (ECJ) are firmly etsablished. The book provides an economic approach to competition policy and reflects the main areas of interest, open issues and progress in the area. The volume examines the design of competition policy institutions, the evolution of the implementation of competition policy and its convergence or divergence with US practice, restrictive practices, cartels, abuse of dominance, merger control and state aids. The volume also analyses the interaction of competition policy and regulation, and studies its application to telecoms, banking and energy sectors. All chapters are written by leadfing specialists combining theoretical with practical knowledge and discussing the underpinings of the application of law.
Categories: Business & Economics

A New Measure of Competition in the Financial Industry

A New Measure of Competition in the Financial Industry

We also describe the complex relationship between bank competition and
financial stability. On the one hand, more market power (or less competition) may
result in more financial stability when higher banking profits lead to larger capital

Author: Jacob A Bikker

Publisher: Routledge

ISBN: 9781136013126

Category: Business & Economics

Page: 208

View: 292

The 2008 credit crisis started with the failure of one large bank: Lehman Brothers. Since then the focus of both politicians and regulators has been on stabilising the economy and preventing future financial instability. At this juncture, we are at the last stage of future-proofing the financial sector by raising capital requirements and tightening financial regulation. Now the policy agenda needs to concentrate on transforming the banking sector into an engine for growth. Reviving competition in the banking sector after the state interventions of the past years is a key step in this process. This book introduces and explains a relatively new concept in competition measurement: the performance-conduct-structure (PCS) indicator. The key idea behind this measure is that a firm’s efficiency is more highly rewarded in terms of market share and profit, the stronger competitive pressure is. The book begins by explaining the financial market’s fundamental obstacles to competition presenting a brief survey of the complex relationship between financial stability and competition. The theoretical contributions of Hay and Liu and Boone provide the theoretical underpinning for the PCS indicator, while its application to banking and insurance illustrates its empirical qualities. Finally, this book presents a systematic comparison between the results of this approach and (all) existing methods as applied to 46 countries, over the same sample period. This book presents a comprehensive overview of the knowns and unknowns of financial sector competition for commercial and central bankers, policy-makers, supervisors and academics alike.
Categories: Business & Economics

Performance Risk and Competition in the Chinese Banking Industry

Performance  Risk and Competition in the Chinese Banking Industry

Yong Tan. Ben Naceur, S. (2003) The determinants of the Tunisian banking
industry profitability:panelevidence. ... Berger, A.N., Klapper, L.F., and Turk-Ariss,
R. (2009) Bank competition and financial stability. Journal of Financial Services ...

Author: Yong Tan

Publisher: Chandos Publishing

ISBN: 9781780634463

Category: Business & Economics

Page: 264

View: 815

Due to the financial crisis around the world, stability of the banking sector is critical. Several rounds of banking reforms in China have aimed to improve performance and competition, and Performance, Risk and Competition in the Chinese Banking Industry provides a comprehensive analysis of performance, risk, competition and their relationships in Chinese banking industry. The book consists of seven chapters: the first chapter gives an introduction, followed by an overview of the Chinese banking sector in chapter two. Chapter three discusses corporate governance in the Chinese banking sector. The fourth and fifth chapters investigate risk, performance, competition, and their relationships. Chapter six outlines future development of the Chinese banking sector, and finally, chapter seven provides a conclusion. provides a comprehensive analysis of risk conditions in the Chinese banking sector a detailed investigation on the performance of the Chinese banking sector examines the state of competition
Categories: Business & Economics

German Banking Structure Pricing and Competition

German Banking Structure  Pricing and Competition

First , in all three countries , higher levels of national bank concentration are
associated with intensive competition in local ... the economic performance of the
two banking systems that underwent reform and induced improvements in
stability .

Author: Benjamin H. Dietrich

Publisher: Peter Lang

ISBN: 3631590229

Category: Business & Economics

Page: 233

View: 262

The German banking system is characterized by high fragmentation, low profitability and low foreign ownership. Main reason for this is its particular structure that can best be described as forced segmentation. This structure produces local banking markets. The book argues that local bank competition is not as pronounced as national concentration ratios predict and presents a bank pricing study which indicates that local banks, banks located in less densely populated areas and less productive banks tend to charge higher prices for retail bank services than banks that operate nationally. These results as well as lessons drawn from international reforms suggest that the German banking system could benefit from cross-pillar consolidation which promises to export competition from the national to local banking markets. Last but not least, the book analyzes political economy implications of banking reforms and provides suggestions on status quo resolution by identifying ways to facilitate reform implementation in the German banking system.
Categories: Business & Economics

Branch Banking Bank Competition and Financial Stability

Branch Banking  Bank Competition  and Financial Stability

Branch Banking , Bank Competition , and Financial Stability One of the
foundations of the theoretical literature on banking regulation is that branch
banking leads to more stable banking systems by enabling banks to better
diversify their assets ...

Author: Mark Carlson


ISBN: UCR:31210019508462

Category: Banks and banking

Page: 53

View: 236

"It is often argued that branching stabilizes banking systems by facilitating diversification of bank portfolios; however, previous empirical research on the Great Depression offers mixed support for this view. Analyses using state-level data find that states allowing branch banking had lower failure rates, while those examining individual banks find that branch banks were more likely to fail. We argue that an alternative hypothesis can reconcile these seemingly disparate findings. Using data on national banks from the 1920s and 1930s, we show that branch banking increases competition and forces weak banks to exit the banking system. This consolidation strengthens the system as a whole without necessarily strengthening the branch banks themselves. Our empirical results suggest that the effects that branching had on competition were quantitatively more important than geographical diversification for bank stability in the 1920s and 1930s"--NBER website.
Categories: Banks and banking

Regulation and Bank Stability

Regulation and Bank Stability

We can speculate that the Canadian banking system did not go the British route
because of less- intrusive government intervention and the proximity of
competition — the U.S. financial system, which was not restricted by extensive
controls on ...

Author: Michael D. Bordo

Publisher: World Bank Publications


Category: Banking law

Page: 27

View: 858

Categories: Banking law

Bank Mergers

Bank Mergers

Berger , A . N . and T . H . Hannan ( 1992 ) , “ The price - concentration
relationship in banking : a reply ' , Review of ... Canoy , M . , M . van Dijk , J .
Lemmen , R . de Mooij and J . Weigand ( 2001 ) , “ Competition and stability in
banking ' , CBP ...

Author: Jayshree Bose


ISBN: IND:30000117463335

Category: Bank mergers

Page: 350

View: 526

This book attempts to exercise a rare restraint in two very crucial and controversial areas of global bank mergers by blindly extolling the virtues of mega bank mergers and the ceaseless flow of economies of scale it supposedly brings; and to resist the t
Categories: Bank mergers