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, in this paper we examine the correlation in the risk taking behavior of banks, hence systemic risk. The analysis finds that greater competition encourages...
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INFORMACIÓN
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2012/02/01
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Documento de trabajo sobre investigaciones relativas a políticas
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WPS5981
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1
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1
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2012/02/01
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Disclosed
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How does bank competition affect systemic stability ?
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Finance & Private Sector Development