Thünen-Series of Applied Economic Theory - Working Paper 12
Empirical research about structure, conduct and performance in banking markets has developed mostly independently from the microeconomic theory of banking. The present paper reviews the literature by focusing on the links between theoretical and empirical research. It considers basic conditions, variables of market structure, conduct and performance and public policy special to the banking industry. It is shown that the competitive conditions are different in different market segments, and that the trend towards universal banks which are active in different geographic markets gives new challenges to research.