Bank Competition and Financial Stability in Asia Pacific

Fung, K. C.; Lin, Rebecca; Molyneux, Philip

doi:10.2139/ssrn.2136819

Cited by 19 publications

(44 citation statements)

References 0 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…The findings of previous research also indicate that competition and concentration can coexist and as stated in Fu et al (2014), could influence stability through different channels.…”

Section: Literature Reviewmentioning

confidence: 80%

“…Their results indicate that competition is inversely related to most risk indicators, suggesting that competition does not erode bank stability. Fu et al (2014) analyses the tradeoff between competition and financial stability using data from 14 Asia Pacific countries. Their results suggest that greater concentration fosters financial fragility and that lower pricing power also induces bank risk exposure.…”

Section: Literature Reviewmentioning

confidence: 99%

“…For a robustness test, following Jimenez et al (2013), Liu et al (2013), andFu et al (2014), we also use a quadratic term of the measures of competition to capture a possible non-linear relationship between competition and risk. Table 5 reports the system GMM regressions results from risk model specified in Eq.…”

Section: Empirical Analysismentioning

confidence: 99%

See 2 more Smart Citations

Bank competition, concentration and financial stability in the Turkish banking industry

2015

View full text Add to dashboard Cite

“…The findings of previous research also indicate that competition and concentration can coexist and as stated in Fu et al (2014), could influence stability through different channels.…”

Section: Literature Reviewmentioning

confidence: 80%

Section: Literature Reviewmentioning

confidence: 99%

See 1 more Smart Citation

Bank competition, concentration and financial stability in the Turkish banking industry

2015

View full text Add to dashboard Cite

“…As bank size increases, transparency may decrease because of expansion across multiple geographic markets and business line. These might decrease managerial efficiency and corporate control, and might increase operational risk (Fu et al 2014).…”

Section: Brief Literature Reviewmentioning

confidence: 99%

“…The results also suggest that concentration is negatively related to bank risk. Fu et al (2014) analyze the tradeoff between competition and financial stability using data from 14 Asia Pacific countries. Their results suggest that greater concentration fosters financial fragility.…”

Section: Brief Literature Reviewmentioning

confidence: 99%

Bank size, competition and risk in the Turkish banking industry

Kasman

2015

Empirica

View full text Add to dashboard Cite

This paper investigates the impact of bank size and competition on earnings volatility and insolvency risk using quarterly data for commercial banks operating in the Turkish banking industry for the period 2002Q1-2012Q2. The main result of the paper indicates that bank size and earnings volatility are negatively related, suggesting that larger banks are less risky. The results also indicate that competition measured by the Boone indicator increases earnings volatility. The results further suggest that higher capitalized banks, banks with a higher share of non-interest income in total income and efficient banks face lower earnings volatility. Finally, insolvency risk measured by Z-score and bank size are positively related, suggesting that larger banks are more stable.

show abstract

Bank competition, stability, and intervention quality

et al. 2018

View full text Add to dashboard Cite

We use a flexible semi‐parametric estimation approach and a sample of 7,227 U.S., U.K., and Canadian banks for 2009–2015 to provide evidence that banking stability is non‐linearly determined by competition. We show that stability is not monotonic against competition, and may increase and decrease at high competition, has a mixed behaviour at medium competition, and increases at low competition. This non‐monotonic stability behaviour at different competition levels is attributed to the intervention quality, which is found to be an important determinant of the competition–stability relation. It is non‐linearly related to and being revised at different competition levels. As intervention is a policy variable, its level can be adjusted to reduce the competition effects on stability. We illustrate that for the U.S. banking sector, the intervention quality has to hedge these competition effects. Regulators should treat intervention quality as a “hedging instrument” against the destabilizing competition effects.

show abstract

Bank Competition and Financial Stability in Asia Pacific

Cited by 19 publications

References 0 publications

Bank competition, concentration and financial stability in the Turkish banking industry

Bank competition, concentration and financial stability in the Turkish banking industry

Bank size, competition and risk in the Turkish banking industry

Bank competition, stability, and intervention quality

Contact Info

Product

Resources

About