How Does Bank Competition Affect Systemic Stability?

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dc.contributor.author
Anginer, Deniz
en_US
dc.contributor.author
Demirguc-Kunt, Asli
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dc.contributor.author
Zhu, Min
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dc.date.accessioned
2012-03-19T17:29:25Z
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dc.date.available
2012-03-19T17:29:25Z
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dc.date.issued
2012-02-01
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dc.identifier.uri
http://hdl.handle.net/10986/3267
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dc.description.abstract
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 risk taking behavior of banks, hence systemic risk. They find that greater competition encourages banks to take on more diversified risks, making the banking system less fragile to shocks. Examining the impact of the institutional and regulatory environment on systemic stability shows that banking systems are more fragile in countries with weak supervision and private monitoring, with generous deposit insurance and greater government ownership of banks, and public policies that restrict competition. Furthermore, lack of competition has a greater adverse effect on systemic stability in countries with low levels of foreign ownership, weak investor protections, generous safety nets, and where the authorities provide limited guidance for bank asset diversification.
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dc.language
English
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dc.relation.ispartofseries
Policy Research working paper ; no. WPS 5981
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dc.rights
Creative Commons Attribution CC BY 3.0
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dc.rights.uri
http://creativecommons.org/licenses/by/3.0/us/
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dc.subject
ACCESS TO FINANCIAL SERVICES
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dc.subject
ACCOUNTING
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ADVERSE EFFECT
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AMOUNT OF CAPITAL
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ASSET DIVERSIFICATION
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ASSET PRICE
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ASSET PRICES
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ASSET VALUE
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ASSET VALUES
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ASSETS RATIO
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AUSTRIAN NATIONAL BANK
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BALANCE SHEET
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BANK ACTIVITIES
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BANK ASSET
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BANK ASSETS
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BANK CAPITAL
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dc.subject
BANK COMPETITION
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BANK CREDIT
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BANK ENTRY
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BANK HOLDING
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BANK HOLDING COMPANIES
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BANK INVESTORS
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BANK MARKET
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BANK POLICY
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BANK PROFITABILITY
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BANK REGULATION
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BANK RISK
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BANK RISK TAKING
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dc.subject
BANK RUNS
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BANK SUPERVISION
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BANKING ASSETS
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BANKING CONCENTRATION
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dc.subject
BANKING CRISIS
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dc.subject
BANKING INDUSTRIES
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BANKING SECTOR
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BANKING STRUCTURE
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dc.subject
BANKING SYSTEM
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dc.subject
BANKING SYSTEMS
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dc.subject
BANKRUPTCY
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BANKS
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BOOK VALUE
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BORROWING
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dc.subject
BUSINESS CYCLE
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dc.subject
CALL OPTION
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dc.subject
CAPITAL REGULATION
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CAPITAL REQUIREMENTS
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CAPITALIZATION
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dc.subject
CDS
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dc.subject
CHANNELS OF CREDIT
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dc.subject
CHECKS
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COMMERCIAL BANKS
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COMPETITION POLICIES
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COMPETITION POLICY
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COMPETITIVE MARKETS
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CONNECTIVITY
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CORPORATE DEBT
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COUNTRY FIXED EFFECT
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COUNTRY FIXED EFFECTS
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CREDIT ALLOCATION
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CREDIT CRUNCH
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CREDIT INFORMATION
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CREDIT MARKET
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CREDIT MARKETS
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CREDIT RISK
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DEBT
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dc.subject
DEFAULT PROBABILITIES
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DEFAULT PROBABILITY
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DEFAULT RISK
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DEFAULT RISKS
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DEPOSIT
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DEPOSIT INSURANCE
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DEPOSIT INSURANCE COVERAGE
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DEPOSIT MONEY BANKS
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DEPOSITS
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DEREGULATION
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DIVIDEND
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DIVIDEND RATE
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DUMMY VARIABLE
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dc.subject
ECONOMIC DEVELOPMENT
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dc.subject
ECONOMIC STABILITY
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dc.subject
ECONOMICS
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EMERGING MARKETS
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ENTRY BARRIERS
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dc.subject
ENTRY REQUIREMENTS
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EQUITY RETURNS
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EQUITY VALUE
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EXCLUSION
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EXIT POLICIES
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EXPOSURE
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EXPOSURE TO RISK
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FACE VALUE
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FEDERAL RESERVE
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FEDERAL RESERVE BANK
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FEDERAL RESERVE BANK OF NEW YORK
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FEE INCOME
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FINANCIAL CONTAGION
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FINANCIAL CRISES
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FINANCIAL CRISIS
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FINANCIAL DEVELOPMENT
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FINANCIAL FRAGILITY
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FINANCIAL INFORMATION
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FINANCIAL INNOVATIONS
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FINANCIAL INSTITUTION
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FINANCIAL INSTITUTIONS
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FINANCIAL INTERMEDIATION
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FINANCIAL POLICY
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FINANCIAL PRODUCTS
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FINANCIAL SECTOR
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FINANCIAL SERVICES
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FINANCIAL STABILITY
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FINANCIAL STRUCTURE
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FINANCIAL STUDIES
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FINANCIAL SYSTEM
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FINANCIAL SYSTEMS
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FOREIGN BANK
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FOREIGN ENTRY
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FOREIGN INVESTORS
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FOREIGN OWNERSHIP
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FOREIGN OWNERSHIP OF BANKS
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GLOBAL BANKING
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GLOBAL BUSINESS
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GLOBAL MARKET
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GLOBAL STOCK MARKET
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GLOBALIZATION
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GOVERNMENT OWNERSHIP
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GOVERNMENT OWNERSHIP OF BANKS
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GOVERNMENT POLICIES
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GROUP OF BANK
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GROWTH RATE
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IMPLICIT GUARANTEE
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INFORMATION ASYMMETRY
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INFORMATION ON BORROWERS
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INFORMATION SHARING
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INPUT PRICES
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INSTITUTIONAL ENVIRONMENT
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INTEREST EXPENSES
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INTEREST INCOME
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INTEREST RATES
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INTERNATIONAL BANK
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INTERNATIONAL BANKS
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INTERNATIONAL FINANCIAL SYSTEM
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INTERPOLATION
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INVESTOR PROTECTION
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LACK OF COMPETITION
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LEVEL OF RISK
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LEVELS OF CREDIT
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LIBERALIZATION
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LIQUIDITY
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LOAN
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LOAN DEFAULTS
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LOAN LOSS PROVISIONS
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LOAN MARKET
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LOW ENTRY BARRIER
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MARGINAL COST
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MARKET COMPETITION
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MARKET DISCIPLINE
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MARKET EQUITY
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MARKET INFORMATION
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MARKET INTEGRATION
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MARKET LIQUIDITY
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MARKET VALUE
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MONEY MARKET
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MORAL HAZARD
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NEW MARKETS
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OPERATING EXPENSES
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OPERATING INCOME
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OUTPUT
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PERSONNEL EXPENSES
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PORTFOLIOS
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PRIVATE BANKS
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PRIVATE CREDIT
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PRIVATE SECTOR DEVELOPMENT
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PROBABILITY OF DEFAULT
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PROFITABILITY
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PROFITABILITY MEASURES
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PRUDENTIAL REGULATION
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PUBLIC POLICIES
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PUBLIC POLICY
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REAL ESTATE
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REGULATORS
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REGULATORY AUTHORITIES
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REGULATORY ENVIRONMENT
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REGULATORY FRAMEWORK
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RETURN
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RETURN ON ASSETS
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RISK DIVERSIFICATION
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RISK OF BANK FAILURE
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RISK SHARING
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RISK TAKING
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SAFETY NET
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SAFETY NETS
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SECURITIES
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SHARE OF ASSETS
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SHAREHOLDER
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SMALL BANKS
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SOURCES OF CREDIT
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STATE GUARANTEES
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STOCK MARKET
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STOCK MARKET CAPITALIZATION
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STOCK MARKETS
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STOCK PRICE
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STOCK RETURN
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SUPERVISORY AUTHORITIES
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SUPERVISORY POWER
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SUPERVISORY POWERS
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SUPERVISORY POWER
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SYNCHRONOUS STOCK PRICE MOVEMENTS
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SYSTEMIC BANKING CRISES
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SYSTEMIC RISK
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TRADING
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TRADING INCOME
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TREASURY
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TREASURY YIELD
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dc.subject
VALUE OF ASSETS
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dc.subject
VOLATILITY
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dc.title
How Does Bank Competition Affect Systemic Stability?
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okr.identifier.externaldocumentum
000158349_20120229120053
en_US
okr.identifier.internaldocumentum
15878473
en_US
okr.volume
1 of 1
en_US
okr.date.disclosure
2012-02-01
en_US
okr.sector
Finance :: General finance sector
en_US
okr.region.administrative
The World Region
en_US
okr.identifier.report
WPS5981
en_US
okr.identifier.doi
10.1596/1813-9450-5981
en_US
okr.unit
Development Research Group (DECRG)
en_US
okr.unit
DECRG: Finance & Priv Sec Devt (DECFP)
en_US
okr.doctype
Publications & Research :: Policy Research Working Paper
en_US
dc.rights.holder
World Bank
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okr.googlescholar.linkpresent
yes

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