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The Efficiency Cost of Market Power in the Banking Industry

Author: Allen N. Berger
Publisher:
ISBN:
Category : Bank management
Languages : en
Pages : 60

Book Description

Financial Dependence, Banking Sector Competition, and Economic Growth

Author: Stijn Claessens
Publisher: World Bank Publications
ISBN:
Category : Banks and banking
Languages : en
Pages : 49

Book Description
"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.

Trends in Competition and Profitability in the Banking Industry

Author: Jacob A. Bikker
Publisher:
ISBN: 9783902109279
Category : Bank profits
Languages : en
Pages : 88

Book Description
This paper brings to the forefront the assumptions that we make when focussing on a particular type of explanation for bank profitability. We evaluate a broad field of research by introducing a general framework for a profit maximizing bank and demonstrate how different types of models can be fitted into this framework. Next, we present an overview of the current major trends in European banking and relate them to each model's assumptions, thereby shedding light on the relevance, timeliness and shelf life of the different models. This way, we arrive at a set of recommendations for a future research agenda. We advocate a more prominent role for output prices, and suggest a modification of the intermediation approach. We also suggest ways to more clearly distinguish between market power and effciency, and explain why we need time-dependent models. Finally, we propose the application of existing models to different size classes and sub-markets. Throughout we emphasize the benefits from applying several, complementary models to overcome the identification problems that we observe in individual models.

Bank Mergers & Acquisitions

Author: Yakov Amihud
Publisher: Springer Science & Business Media
ISBN: 9780792399759
Category : Business & Economics
Languages : en
Pages : 268

Book Description
As the financial services industry becomes increasingly international, the more narrowly defined and historically protected national financial markets become less significant. Consequently, financial institutions must achieve a critical size in order to compete. Bank Mergers & Acquisitions analyses the major issues associated with the large wave of bank mergers and acquisitions in the 1990's. While the effects of these changes have been most pronounced in the commercial banking industry, they also have a profound impact on other financial institutions: insurance firms, investment banks, and institutional investors. Bank Mergers & Acquisitions is divided into three major sections: A general and theoretical background to the topic of bank mergers and acquisitions; the effect of bank mergers on efficiency and shareholders' wealth; and regulatory and legal issues associated with mergers of financial institutions. It brings together contributions from leading scholars and high-level practitioners in economics, finance and law.

Efficiency in European Banking

Author: Philip Molyneux
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 368

Book Description
This study examines the current state of banking within Europe. It describes how banks are experiencing greater deregulation, allowing for stronger competition and a more restrictive regulation of supervision. This has led to corporate restructuring within the banking industry.

Asymmetric Information and the Market Structure of the Banking Industry

Author: Mr.Giovanni Dell'Ariccia
Publisher: International Monetary Fund
ISBN: 145195154X
Category : Business & Economics
Languages : en
Pages : 32

Book Description
The paper analyzes the effects of informational asymmetries on the market structure of the banking industry in a multi-period model of spatial competition. All lenders face uncertainty with regard to borrowers’ creditworthiness, but, in the process of lending, incumbent banks gather proprietary information about their clients, acquiring an advantage over potential entrants. These informational asymmetries are an important determinant of the industry structure and may represent a barrier to entry for new banks. The paper shows that, in contrast with traditional models of horizontal differentiation, the steady-state equilibrium is characterized by a finite number of banks even in the absence of fixed costs.

Capital Markets and Financial Intermediation

Author: Colin Mayer
Publisher: Cambridge University Press
ISBN: 9780521558532
Category : Business & Economics
Languages : en
Pages : 384

Book Description
Financial intermediation is currently a subject of active research on both sides of the Atlantic. The integration of European financial markets, in particular, highlights several important issues. In this volume, derived from a joint CEPR conference with the Fundacion Banco Bilbao Vizcaya (BBV), leading academics from Europe and North America review 'state-of-the-art' theories of banking and financial intermediation and discuss their policy implications. The principal focus is on the risks of increased competition, the appropriate regulation of banks, and the differences between Anglo-American and Continental European forms of financial markets. Relationship banking, stock markets and banks, banking and corporate control, financial intermediation in Eastern Europe, monetary policy and the banking system, and financial intermediation and growth are also discussed.