Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/152580
Authors: 
Carletti, Elena
Hartmann, Philipp
Year of Publication: 
2002
Series/Report no.: 
ECB Working Paper 146
Abstract: 
This paper examines the relationship between competition policies and policies to preserve stability in the banking sector. Market structures and the relative importance of the three classical antitrust areas for banking are discussed, showing the predominance of merger review considerations for loan and deposit markets as well as the relevance of cartel considerations for payment systems. A core part of the paper is an analysis of the relative roles of competition and supervisory authorities in the review of bank mergers for the G-7 industrialised countries. A wide variety of approaches emerges, with some countries giving a stronger role to prudential supervisors than to competition authorities and other countries doing it the other way round. In search for explanations for this diversity the theoretical and empirical literature on the competition-stability nexus in banking is surveyed. It turns out that the widely accepted trade-off between competition and stability does not generally hold.
Subjects: 
antitrust policies
Bank competition
banking supervision
financial stability
mergers & acquisitions
JEL: 
G21
G28
G34
K21
L4
Document Type: 
Working Paper

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