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http://hdl.handle.net/10419/29556
  
Title:Consolidation in banking and financial stability in Europe: empirical evidence PDF Logo
Authors:Uhde, André
Heimeshoff, Ulrich
Issue Date:2009
Series/Report no.:IWQW discussion paper series 02/2009
Abstract:Using aggregate balance sheet data from banks across the EU-25 over the period from 1997 to 2005 this paper provides empirical evidence that national banking market concentration has a negative impact on European banks' financial soundness as measured by the Z-score technique while controlling for macroeconomic, bank-specific, regulatory, and institutional factors. Furthermore, we find that Eastern European banking markets exhibiting a lower level of competitive pressure, fewer diversification opportunities and a higher fraction of government-owned banks are more prone to financial fragility whereas capital regulations have supported financial stability across the entire European Union.
Subjects:Market structure
Financial stability
Banking regulation
JEL:G21
G28
G34
L16
Document Type:Working Paper
Appears in Collections:IWQW Discussion Paper Series, FAU Erlangen-Nürnberg

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