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Using the Panzar and Rosse H-statistic as a measure of competition in 45 countries, we find that more competitive banking systems are less prone to experience a systemic crisis and exhibit increased time to crisis. This result holds even when we control for banking system concentration, which is associated with higher probability of a crisis and shorter time to crisis. Our results indicate that competition and concentration capture different characteristics of banking systems, meaning that concentration is an inappropriate proxy for competition. The findings suggest that policies promoting competition among banks, if well executed, have the potential to improve systemic stability. Copyright (c) 2009 The Ohio State University.

This paper investigates the effect of revenue diversification on bank performance and risk. Using a panel dataset of 226 listed banks across 11 emerging economies and a new methodological approach, System Generalized Method of Moments estimators (System GMM), the results in this paper provide empirical evidence of the impact of the observed shift towards non-interest income generating activities on insolvency risk and bank performance. The core finding is that diversification across and within both interest and non-interest income generating activities decrease insolvency risk and enhance profitability. The results also show that these benefits are largest for banks with moderate risk exposures. By extension, these results have significant strategic implications for bank managers, regulators and supervisors who share a common interest in boosting bank performance and stability. We thank Robert Sauer, John Micklewright, Klaus Schaeck, Mohammed Amidu, Alistair Milne and an anonymous referee for helpful comments.

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PurposeThe purpose of this paper is to compare and evaluate the internet banking services of Turkey and the UK.Design/methodology/approachThe paper is based on an exploratory research for a sample of nine banks from each country, a web survey is conducted to collect data for each internet bank using an analytical framework based on a three dimensional model.FindingsIt is found that Turkish banks offer a wider range of services from their internet branches compared to British banks, despite the fact that the UK has a more favourable environment for internet banking in terms of the level of sophistication of its banking sector and technological infrastructure. Furthermore, a key difference is observed in the approaches of banks towards the issue of “security”.Research limitations/implicationsThe findings of this paper are reached by the use of a simplified model that only focuses on the transaction side of internet banking. Therefore, further research could encompass other aspects from the provider's perspective of the internet banking environment within a refined model.Practical implicationsThe paper suggests that there is a fundamental difference in the banks' approaches to dealing with security problems and insights can be gained from cross‐country peer group analysis. Furthermore, the study assists researchers and practitioners to evaluate and build upon their e‐business provision.Originality/valueThe paper is the first of its kind, that the authors are aware of, to conduct a cross‐country analysis of internet banking services.