Competition Vs Stability Oligopolistic Banking System With Run Risk
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Competition Vs Stability Oligopolistic Banking System With Run Risk
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Author : Mr. Damien Capelle
language : en
Publisher: International Monetary Fund
Release Date : 2021-04-23
Competition Vs Stability Oligopolistic Banking System With Run Risk written by Mr. Damien Capelle and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-04-23 with Business & Economics categories.
This paper develops a model where large financial intermediaries subject to systemic runs internalize the effect of their leverage on aggregate risk, returns and asset prices. Near the steady-state, they restrict leverage to avoid the risk of a run which gives rise to an accelerator effect. For large adverse shocks, the system enters a zone with high leverage and possibly runs. The length of time the system remains in this zone depends on the degree of concentration through a franchise value, price-drop and recapitalization channels. The speed of entry of new banks after a collapse has a stabilizing effect.
Bank Risk Taking And Competition Revisited
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Author : Mr.Gianni De Nicolo
language : en
Publisher: International Monetary Fund
Release Date : 2006-12-01
Bank Risk Taking And Competition Revisited written by Mr.Gianni De Nicolo and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006-12-01 with Business & Economics categories.
This paper studies two new models in which banks face a non-trivial asset allocation decision. The first model (CVH) predicts a negative relationship between banks' risk of failure and concentration, indicating a trade-off between competition and stability. The second model (BDN) predicts a positive relationship, suggesting no such trade-off exists. Both models can predict a negative relationship between concentration and bank loan-to-asset ratios, and a nonmonotonic relationship between bank concentration and profitability. We explore these predictions empirically using a cross-sectional sample of about 2,500 U.S. banks in 2003 and a panel data set of about 2,600 banks in 134 nonindustrialized countries for 1993-2004. In both these samples, we find that banks' probability of failure is positively and significantly related to concentration, loan-to-asset ratios are negatively and significantly related to concentration, and bank profits are positively and significantly related to concentration. Thus, the risk predictions of the CVH model are rejected, those of the BDN model are not, there is no trade-off between bank competition and stability, and bank competition fosters the willingness of banks to lend.
Competition And Stability In Banking
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Author : Xavier Vives
language : en
Publisher: Princeton University Press
Release Date : 2020-11-03
Competition And Stability In Banking written by Xavier Vives and has been published by Princeton University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-11-03 with Business & Economics categories.
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.
Bank Competition And Financial Stability
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Author : OECD
language : en
Publisher: OECD Publishing
Release Date : 2011-10-05
Bank Competition And Financial Stability written by OECD and has been published by OECD Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-10-05 with categories.
This report examines the interplay between banking competition and financial stability, taking into account the experiences in the recent global crisis and the policy response to it. The report has been prepared by members of the Directorate of ...
The Banking Industry In The Emerging Market Economies
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Author : Bank for International Settlements
language : en
Publisher:
Release Date : 2013
The Banking Industry In The Emerging Market Economies written by Bank for International Settlements and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.
Recent developments in the banking industry in emerging economies, such as competition and consolidation, and their implications for systemic stability, were discussed at a meeting of senior central bankers held at the BIS in December 2000. Revised versions of the overview paper prepared by the BIS for the meeting, and papers prepared by the attendees on developments in their own economies, are included in this volume of BIS Papers. The developments are being driven by technological innovation, deregulation and changes in corporate behaviour, in some cases accentuated by recent banking crises. Important aspects include privatisation of state-owned banks, mergers of domestic banks and entry of foreign banks. Although prepared independently, in some ways this volume discussing developments in emerging economies complements the G10 volume Report on Consolidation in the Financial Sector which discusses developments in the advanced economies.
Bank Competition And Financial Stability
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Author : Mr.Gianni De Nicolo
language : en
Publisher: International Monetary Fund
Release Date : 2011-12-01
Bank Competition And Financial Stability written by Mr.Gianni De Nicolo and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-12-01 with Business & Economics categories.
We study versions of a general equilibrium banking model with moral hazard under either constant or increasing returns to scale of the intermediation technology used by banks to screen and/or monitor borrowers. If the intermediation technology exhibits increasing returns to scale, or it is relatively efficient, then perfect competition is optimal and supports the lowest feasible level of bank risk. Conversely, if the intermediation technology exhibits constant returns to scale, or is relatively inefficient, then imperfect competition and intermediate levels of bank risks are optimal. These results are empirically relevant and carry significant implications for financial policy.
Fintech In Sub Saharan African Countries
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Author : Mr.Amadou N Sy
language : en
Publisher: International Monetary Fund
Release Date : 2019-02-14
Fintech In Sub Saharan African Countries written by Mr.Amadou N Sy and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-02-14 with Business & Economics categories.
FinTech is a major force shaping the structure of the financial industry in sub-Saharan Africa. New technologies are being developed and implemented in sub-Saharan Africa with the potential to change the competitive landscape in the financial industry. While it raises concerns on the emergence of vulnerabilities, FinTech challenges traditional structures and creates efficiency gains by opening up the financial services value chain. Today, FinTech is emerging as a technological enabler in the region, improving financial inclusion and serving as a catalyst for the emergence of innovations in other sectors, such as agriculture and infrastructure.
Monetary History Exchange Rates And Financial Markets
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Author : Charles Albert Eric Goodhart
language : en
Publisher: Edward Elgar Publishing
Release Date : 2003-01-01
Monetary History Exchange Rates And Financial Markets written by Charles Albert Eric Goodhart and has been published by Edward Elgar Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003-01-01 with Business & Economics categories.
Monetary History, Exchange Rates and Financial Markets is an impressive collection of original papers in honour of Charles Goodhart's outstanding contribution to monetary economics and policy. Charles Goodhart has written extensively on many of these topics and has become synonymous with his field; the chapters within this book offer a summary of current thinking on his own research subjects and include perspectives on controversies surrounding them.
Risk Management And Regulation
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Author : Tobias Adrian
language : en
Publisher: International Monetary Fund
Release Date : 2018-08-01
Risk Management And Regulation written by Tobias Adrian and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018-08-01 with Business & Economics categories.
The evolution of risk management has resulted from the interplay of financial crises, risk management practices, and regulatory actions. In the 1970s, research lay the intellectual foundations for the risk management practices that were systematically implemented in the 1980s as bond trading revolutionized Wall Street. Quants developed dynamic hedging, Value-at-Risk, and credit risk models based on the insights of financial economics. In parallel, the Basel I framework created a level playing field among banks across countries. Following the 1987 stock market crash, the near failure of Salomon Brothers, and the failure of Drexel Burnham Lambert, in 1996 the Basel Committee on Banking Supervision published the Market Risk Amendment to the Basel I Capital Accord; the amendment went into effect in 1998. It led to a migration of bank risk management practices toward market risk regulations. The framework was further developed in the Basel II Accord, which, however, from the very beginning, was labeled as being procyclical due to the reliance of capital requirements on contemporaneous volatility estimates. Indeed, the failure to measure and manage risk adequately can be viewed as a key contributor to the 2008 global financial crisis. Subsequent innovations in risk management practices have been dominated by regulatory innovations, including capital and liquidity stress testing, macroprudential surcharges, resolution regimes, and countercyclical capital requirements.
Market Based Banking And The International Financial Crisis
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Author : Iain Hardie
language : en
Publisher: Oxford University Press
Release Date : 2013-08-29
Market Based Banking And The International Financial Crisis written by Iain Hardie and has been published by Oxford University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-08-29 with Business & Economics categories.
This edited volume offers a study of national banking systems and explains how banking developed in the years preceding the international financial crisis that erupted in 2007. Its analysis of market-based banking shows the impact of the financial crisis in eleven developed economies, including all of the G7 economies.