Linking the Cs of Financial Stability: Crises, Competition, and Concentration

Bagsic, Cristeta (2021): Linking the Cs of Financial Stability: Crises, Competition, and Concentration.

Abstract

This paper is a replication and extension of Schaeck, Cihak, and Wolfe (2009). In contrast to results for a heterogeneous set of countries in Schaeck, Cihak, and Wolfe (2009), findings herein indicate that there is a chance that competition engenders systemic banking crisis for ASEAN EMEs, and that although concentration may not increase the probability of a banking crisis, at decreasing levels of competition, increasing concentration could damage financial stability. When controls for regulation and macroprudential tools are introduced, the opposite effects of competition and concentration on financial stability becomes more apparent.

• Item Type: MPRA Paper
• Language: English
• Keywords: financial stability; concentration; competition; banking crises
• Subjects: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit; G - Financial Economics > G1 - General Financial Markets

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