Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/79919 
Year of Publication: 
2013
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2013: Wettbewerbspolitik und Regulierung in einer globalen Wirtschaftsordnung - Session: Leverage No. D21-V2
Publisher: 
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft, Kiel und Hamburg
Abstract: 
This study investigates the bank competition-stability nexus using a unique regulatory dataset provided by the Deutsche Bundesbank over the period 1994 to 2010. First, we use outright bank defaults as the most direct measure of bank risk available and contrast the results to weaker forms of bank distress. Second, we control for a wide array of different time-varying characteristics of banks which are likely to influence the competition-risk taking channel. Third, we include different measures of competition, contestability and market power, each corresponding to a different contextual level of a bank s competitive environment. From a policy perspective, our results indicate that competition-reducing regulation does not necessarily enhance the stability of individual banks. Instead, our results show that the degree of competition affects bank risk in different ways; some of them with stability-enhancing effects, but others apparently not.
JEL: 
C35
G21
G32
Document Type: 
Conference Paper

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