How Does Bank Competition Affect Systemic Stability?

Anginer, Deniz; Demirguc-Kunt, Asli; Zhu, Min

dc.creator	Anginer, Deniz
dc.creator	Demirguc-Kunt, Asli
dc.creator	Zhu, Min
dc.date	2012-03-19T17:29:25Z
dc.date	2012-03-19T17:29:25Z
dc.date	2012-02-01
dc.date.accessioned	2023-02-17T20:50:14Z
dc.date.available	2023-02-17T20:50:14Z
dc.identifier	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20120229120053
dc.identifier	http://hdl.handle.net/10986/3267
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/243718
dc.description	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.
dc.language	English
dc.relation	Policy Research working paper ; no. WPS 5981
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	ACCESS TO FINANCIAL SERVICES
dc.subject	ACCOUNTING
dc.subject	ADVERSE EFFECT
dc.subject	AMOUNT OF CAPITAL
dc.subject	ASSET DIVERSIFICATION
dc.subject	ASSET PRICE
dc.subject	ASSET PRICES
dc.subject	ASSET VALUE
dc.subject	ASSET VALUES
dc.subject	ASSETS RATIO
dc.subject	AUSTRIAN NATIONAL BANK
dc.subject	BALANCE SHEET
dc.subject	BANK ACTIVITIES
dc.subject	BANK ASSET
dc.subject	BANK ASSETS
dc.subject	BANK CAPITAL
dc.subject	BANK COMPETITION
dc.subject	BANK CREDIT
dc.subject	BANK ENTRY
dc.subject	BANK HOLDING
dc.subject	BANK HOLDING COMPANIES
dc.subject	BANK INVESTORS
dc.subject	BANK MARKET
dc.subject	BANK POLICY
dc.subject	BANK PROFITABILITY
dc.subject	BANK REGULATION
dc.subject	BANK RISK
dc.subject	BANK RISK TAKING
dc.subject	BANK RUNS
dc.subject	BANK SUPERVISION
dc.subject	BANKING ASSETS
dc.subject	BANKING CONCENTRATION
dc.subject	BANKING CRISIS
dc.subject	BANKING INDUSTRIES
dc.subject	BANKING SECTOR
dc.subject	BANKING STRUCTURE
dc.subject	BANKING SYSTEM
dc.subject	BANKING SYSTEMS
dc.subject	BANKRUPTCY
dc.subject	BANKS
dc.subject	BOOK VALUE
dc.subject	BORROWING
dc.subject	BUSINESS CYCLE
dc.subject	CALL OPTION
dc.subject	CAPITAL REGULATION
dc.subject	CAPITAL REQUIREMENTS
dc.subject	CAPITALIZATION
dc.subject	CDS
dc.subject	CHANNELS OF CREDIT
dc.subject	CHECKS
dc.subject	COMMERCIAL BANKS
dc.subject	COMPETITION POLICIES
dc.subject	COMPETITION POLICY
dc.subject	COMPETITIVE MARKETS
dc.subject	CONNECTIVITY
dc.subject	CORPORATE DEBT
dc.subject	COUNTRY FIXED EFFECT
dc.subject	COUNTRY FIXED EFFECTS
dc.subject	CREDIT ALLOCATION
dc.subject	CREDIT CRUNCH
dc.subject	CREDIT INFORMATION
dc.subject	CREDIT MARKET
dc.subject	CREDIT MARKETS
dc.subject	CREDIT RISK
dc.subject	DEBT
dc.subject	DEFAULT PROBABILITIES
dc.subject	DEFAULT PROBABILITY
dc.subject	DEFAULT RISK
dc.subject	DEFAULT RISKS
dc.subject	DEPOSIT
dc.subject	DEPOSIT INSURANCE
dc.subject	DEPOSIT INSURANCE COVERAGE
dc.subject	DEPOSIT MONEY BANKS
dc.subject	DEPOSITS
dc.subject	DEREGULATION
dc.subject	DIVIDEND
dc.subject	DIVIDEND RATE
dc.subject	DUMMY VARIABLE
dc.subject	ECONOMIC DEVELOPMENT
dc.subject	ECONOMIC STABILITY
dc.subject	ECONOMICS
dc.subject	EMERGING MARKETS
dc.subject	ENTRY BARRIERS
dc.subject	ENTRY REQUIREMENTS
dc.subject	EQUITY RETURNS
dc.subject	EQUITY VALUE
dc.subject	EXCLUSION
dc.subject	EXIT POLICIES
dc.subject	EXPOSURE
dc.subject	EXPOSURE TO RISK
dc.subject	FACE VALUE
dc.subject	FEDERAL RESERVE
dc.subject	FEDERAL RESERVE BANK
dc.subject	FEDERAL RESERVE BANK OF NEW YORK
dc.subject	FEE INCOME
dc.subject	FINANCIAL CONTAGION
dc.subject	FINANCIAL CRISES
dc.subject	FINANCIAL CRISIS
dc.subject	FINANCIAL DEVELOPMENT
dc.subject	FINANCIAL FRAGILITY
dc.subject	FINANCIAL INFORMATION
dc.subject	FINANCIAL INNOVATIONS
dc.subject	FINANCIAL INSTITUTION
dc.subject	FINANCIAL INSTITUTIONS
dc.subject	FINANCIAL INTERMEDIATION
dc.subject	FINANCIAL POLICY
dc.subject	FINANCIAL PRODUCTS
dc.subject	FINANCIAL SECTOR
dc.subject	FINANCIAL SERVICES
dc.subject	FINANCIAL STABILITY
dc.subject	FINANCIAL STRUCTURE
dc.subject	FINANCIAL STUDIES
dc.subject	FINANCIAL SYSTEM
dc.subject	FINANCIAL SYSTEMS
dc.subject	FOREIGN BANK
dc.subject	FOREIGN ENTRY
dc.subject	FOREIGN INVESTORS
dc.subject	FOREIGN OWNERSHIP
dc.subject	FOREIGN OWNERSHIP OF BANKS
dc.subject	GLOBAL BANKING
dc.subject	GLOBAL BUSINESS
dc.subject	GLOBAL MARKET
dc.subject	GLOBAL STOCK MARKET
dc.subject	GLOBALIZATION
dc.subject	GOVERNMENT OWNERSHIP
dc.subject	GOVERNMENT OWNERSHIP OF BANKS
dc.subject	GOVERNMENT POLICIES
dc.subject	GROUP OF BANK
dc.subject	GROWTH RATE
dc.subject	IMPLICIT GUARANTEE
dc.subject	INFORMATION ASYMMETRY
dc.subject	INFORMATION ON BORROWERS
dc.subject	INFORMATION SHARING
dc.subject	INPUT PRICES
dc.subject	INSTITUTIONAL ENVIRONMENT
dc.subject	INTEREST EXPENSES
dc.subject	INTEREST INCOME
dc.subject	INTEREST RATES
dc.subject	INTERNATIONAL BANK
dc.subject	INTERNATIONAL BANKS
dc.subject	INTERNATIONAL FINANCIAL SYSTEM
dc.subject	INTERPOLATION
dc.subject	INVESTOR PROTECTION
dc.subject	LACK OF COMPETITION
dc.subject	LEVEL OF RISK
dc.subject	LEVELS OF CREDIT
dc.subject	LIBERALIZATION
dc.subject	LIQUIDITY
dc.subject	LOAN
dc.subject	LOAN DEFAULTS
dc.subject	LOAN LOSS PROVISIONS
dc.subject	LOAN MARKET
dc.subject	LOW ENTRY BARRIER
dc.subject	MARGINAL COST
dc.subject	MARKET COMPETITION
dc.subject	MARKET DISCIPLINE
dc.subject	MARKET EQUITY
dc.subject	MARKET INFORMATION
dc.subject	MARKET INTEGRATION
dc.subject	MARKET LIQUIDITY
dc.subject	MARKET VALUE
dc.subject	MONEY MARKET
dc.subject	MORAL HAZARD
dc.subject	NEW MARKETS
dc.subject	OPERATING EXPENSES
dc.subject	OPERATING INCOME
dc.subject	OUTPUT
dc.subject	PERSONNEL EXPENSES
dc.subject	PORTFOLIOS
dc.subject	PRIVATE BANKS
dc.subject	PRIVATE CREDIT
dc.subject	PRIVATE SECTOR DEVELOPMENT
dc.subject	PROBABILITY OF DEFAULT
dc.subject	PROFITABILITY
dc.subject	PROFITABILITY MEASURES
dc.subject	PRUDENTIAL REGULATION
dc.subject	PUBLIC POLICIES
dc.subject	PUBLIC POLICY
dc.subject	REAL ESTATE
dc.subject	REGULATORS
dc.subject	REGULATORY AUTHORITIES
dc.subject	REGULATORY ENVIRONMENT
dc.subject	REGULATORY FRAMEWORK
dc.subject	RETURN
dc.subject	RETURN ON ASSETS
dc.subject	RISK DIVERSIFICATION
dc.subject	RISK OF BANK FAILURE
dc.subject	RISK SHARING
dc.subject	RISK TAKING
dc.subject	SAFETY NET
dc.subject	SAFETY NETS
dc.subject	SECURITIES
dc.subject	SHARE OF ASSETS
dc.subject	SHAREHOLDER
dc.subject	SMALL BANKS
dc.subject	SOURCES OF CREDIT
dc.subject	STATE GUARANTEES
dc.subject	STOCK MARKET
dc.subject	STOCK MARKET CAPITALIZATION
dc.subject	STOCK MARKETS
dc.subject	STOCK PRICE
dc.subject	STOCK RETURN
dc.subject	SUPERVISORY AUTHORITIES
dc.subject	SUPERVISORY POWER
dc.subject	SUPERVISORY POWERS
dc.subject	SUPERVISORY POWER
dc.subject	SYNCHRONOUS STOCK PRICE MOVEMENTS
dc.subject	SYSTEMIC BANKING CRISES
dc.subject	SYSTEMIC RISK
dc.subject	TRADING
dc.subject	TRADING INCOME
dc.subject	TREASURY
dc.subject	TREASURY YIELD
dc.subject	VALUE OF ASSETS
dc.subject	VOLATILITY
dc.title	How Does Bank Competition Affect Systemic Stability?
dc.type	Publications & Research :: Policy Research Working Paper
dc.coverage	The World Region