Competition Policy for Modern Banks PDF Download

Author: Mr.Lev Ratnovski
Publisher: International Monetary Fund
ISBN: 1484366174
Category : Business & Economics
Languages : en
Pages : 20

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Book Description
Traditional bank competition policy seeks to balance efficiency with incentives to take risk. The main tools are rules guiding entry/exit and consolidation of banks. This paper seeks to refine this view in light of recent changes to financial services provision. Modern banking is largely market-based and contestable. Consequently, banks in advanced economies today have structurally low charter values and high incentives to take risk. In such an environment, traditional policies that seek to affect the degree of competition by focusing on market structure (i.e. concentration) may have limited effect. We argue that bank competition policy should be reoriented to deal with the too-big-to-fail (TBTF) problem. It should also focus on the permissible scope of activities rather than on market structure of banks. And following a crisis, competition policy should facilitate resolution by temporarily allowing higher concentration and government control of banks.

Author: Xavier Vives
Publisher: Princeton University Press
ISBN: 0691210039
Category : Business & Economics
Languages : en
Pages : 344

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Book Description
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.

Author: Günther Bröker
Publisher: Organisation for Economic Co-operation and Development ; Washington, D.C. : OECD Publications and Information Centre
ISBN:
Category : Business & Economics
Languages : en
Pages : 250

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Book Description
Presents the results of an extensive enquiry into banking structures and regulations in OECD countries and assesses the most significant changes since the early sixty. Includes a history of deregulation and an inventory of relevant anti-trust laws, a set of definitions on financial regulation and competition policy and statistics on structural changes in financial systems.

Author: Stijn Claessens
Publisher:
ISBN:
Category : Electronic book
Languages : en
Pages :

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Book Description
Competition in the financial sector, as in other sectors, matters for allocative, productive, and dynamic efficiency. Theory suggests, however, that unfettered competition is not necessarily best given the special features of financial services. The author discusses these analytical complications before reviewing how to assess competition in the financial sector and its determinants. It is shown that competitiveness varies greatly across countries, in perhaps surprising ways, and that it is not driven by financial system concentration. Rather, systems with greater foreign entry and fewer entry and activity restrictions tend to be more competitive, confirming that contestability--the lack of barriers to entry and exit--determines effective competition. The author then analyzes how competition policy in the financial sector has generally been conducted and how changes in competition in the financial services industries should affect competition policy going forward. In part based on comparison with other industries, the author provides some suggestions on how competition policy in the financial sector could be better approached as well as what institutional arrangements best fit a modern view of competition policy in the sector. The specific competition challenges for developing countries is also highlighted. The author concludes that practices today fall far short of the need for better competition policy in the financial sector.

Author: George Norman
Publisher: Cambridge University Press
ISBN: 1139428586
Category : Business & Economics
Languages : en
Pages : 309

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Book Description
This 2000 text applies modern advances in game theory to the analysis of competition policy and develops some of the theoretical and policy concerns associated with the pioneering work of Louis Phlips. Containing contributions by leading scholars from Europe and North America, this book observes a common theme in the relationship between the regulatory regime and market structure. Since the inception of the new industrial organization, economists have developed a better understanding of how real-world markets operate. These results have particular relevance to the design and application of anti-trust policy. Analyses indicate that picking the most competitive framework in the short run may be detrimental to competition and welfare in the long run, concentrating the attention of policy makers on the impact on the long-run market structure. This book provides essential reading for graduate students of industrial and managerial economics as well as researchers and policy makers.

Author: R. S. Khemani
Publisher: World Bank Publications
ISBN: 9780821342886
Category : Law
Languages : en
Pages : 172

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Book Description
A dynamic and competitive environment, underpinned by competition law policy, is an essential characteristic of successful market economies. To satisfy the growing demand for information on current approaches and practices in competition law policy, the project "Framework for the Design and Implementation of Competition Law-Policy" was initiated by the World Bank, with participation by OECD. This ensuing volume reflects the main issues that arise in design and implementation of competition law and policy in order to assist countries in developing an approach that suits their own needs and conditions. The views articulated in this publication suggest that the administration and enforcement of competition law policy should assign the greatest importance to fostering economic efficiency and consumer welfare.

Author: Slade Mendenhall
Publisher:
ISBN:
Category :
Languages : en
Pages : 18

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Book Description
An existing literature examines the degree to which modern commercial banking constitutes a competitive industry and the effects of various policies on the degree of competition in that market. This paper applies time series analysis to examine competitiveness over the period since the passage of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, with particular attention to whether there are any observable changes in the state of competition since the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Author: Gianni De Nicoló
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 42

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Book Description
We study a banking model in which banks invest in a riskless asset and compete in both deposit and risky loan markets. The model predicts that as competition increases, both loans and assets increase; however, the effect on the loans-to-assets ratio is ambiguous. Similarly, as competition increases, the probability of bank failure can either increase or decrease. We explore these predictions empirically using a cross-sectional sample of 2,500 U.S. banks in 2003, and a panel data set of about 2600 banks in 134 non-industrialized countries for the period 1993-2004. With both samples, we find that banks' probability of failure is negatively and significantly related to measures of competition, and that the loan-to-asset ratio is positively and significantly related to measures of competition. Furthermore, several loan loss measures commonly employed in the literature are negatively and significantly related to measures of bank competition. Thus, there is no evidence of a trade-off between bank competition and stability, and bank competition seems to foster banks' willingness to lend.

Author: Shelagh Heffernan
Publisher: Wiley
ISBN: 9780471962090
Category : Business & Economics
Languages : en
Pages : 470

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Book Description
The banking world is changing rapidly. The strategic priority has shifted away from growth and size alone towards a greater emphasis on profitability, performance and ?value creation? within the banking firm. Bank professionals now require a thorough grounding in the micro foundations of banking if they are to make important managerial decisions, or implement banking policies. Containing up-to-date case studies, this book is concerned with the theory and practice of banking now, and the prospects for the future. Unlike many other books in this area, this text is devoted to the micro issues of banking, including competition, structure, performance, risks and regulation. "?rigorous, topical and it provides a good insight into some of the major empirical and policy research fields of modern banking ? an important and stimulating contribution to the micro banking literature. It should be required reading for banking students, researchers, banking professionals, and all who are interested in modern banks and banking." Edward Gardener, Institute of European Finance, University of Wales, Bangor, UK "? it takes an international approach to the subject of banking and combines that perspective with the more conventional aspects of the subject treated in a modern textbook. ? the writing is clear and concise ? I think you have a winner in this book." Ingo Walter, New York University Salomon Center, USA

Author: Board of Governors of the Federal Reserve System
Publisher:
ISBN: 9780894991967
Category : Banks and Banking
Languages : en
Pages : 0

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Book Description
Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.