Are more competitive banking systems more stable?
By: prepared by Klaus Schaech, Martin Čihák, and Simon Wolfe.
Contributors: Čihák, Martin.; Wolfe, Simon.; International Monetary Fund. Monetary and Financial Systems Dept.
Series: IMF working paper -- WP/06/143
Publisher: International Monetary Fund, Monetary and Financial Systems Dept.
Published: 2006
Place of publication: Washington, D.C
Language: eng
Number of pages: 35
Subjects: Competition -- Econometric models.; Banks and banking -- Econometric models.
Description: This paper provides the first empirical analysis of the cross-country relationship between a direct measure of competitive conduct of financial institutions and banking system fragility. Using the Panzar and Rosse H-Statistic as a measure for competition in 38 countries during 1980-2003, we present evidence that more competitive banking systems are less prone to systemic crises and that time to crisis is longer in a competitive environment. Our results hold when concentration and the regulatory environment are controlled for and are robust to different methodologies, different sampling periods, and alternative samples.
Notes: "June 2006"--Cover.

Includes bibliographical references (p. 30-35).

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