This is the accepted version of the paper.This version of the publication may differ from the final published version. Permanent AbstractThis paper documents large cross-country variation in the relationship between bank competition and bank stability and explores market, regulatory and institutional features that can explain this variation. Weshow that an increase in competition will have a larger impact on banks' risk taking incentives in countries with stricter activity restrictions, more homogenous bank revenue structures, more generous deposit insurance and more effective systems of credit information sharing. The effects are economically large and thus have important repercussions for the current regulatory reform debate.

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