Bank Competition and Loan Quality

Gómez, Fabiana; Ponce, Jorge

doi:10.1007/s10693-013-0179-x

Cited by 22 publications

(14 citation statements)

References 28 publications

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“…Thus, the present study contributes to the existing literature in three different ways. The adoption of the semi-parametric non-linear approach is motivated further by Berger, Klapper, and Turk-Ariss (2009), Gomez and Ponce (2014) Pino and Araya (2013), and Boyd and De Nicolo (2005) who argued that there are neither compelling theoretical arguments nor robust empirical evidence on the shape of the relation between banking stability and the degree of competition. This is different from previous studies that explored the non-linearity up to the squared level.…”

Section: Introductionmentioning

confidence: 99%

“…First, in contrast to previous empirical studies on these relations, the GAM does not impose any restrictive linear or non-linear parameterization of the model and offers a flexible semi-parametric approach to modelling bank stability (Kanas, Vasiliou, & Eriotis, 2012). The adoption of the semi-parametric non-linear approach is motivated further by Berger, Klapper, and Turk-Ariss (2009), Gomez and Ponce (2014) Pino and Araya (2013), and Boyd and De Nicolo (2005) who argued that there are neither compelling theoretical arguments nor robust empirical evidence on the shape of the relation between banking stability and the degree of competition. This implies that a semi-parametric approach is useful because it allows the underlying relation to be obtained from the data.…”

Section: Introductionmentioning

confidence: 99%

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Bank competition, stability, and intervention quality

et al. 2018

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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.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Bank competition, stability, and intervention quality

et al. 2018

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“…In addition to the traditionally studied in the scientific literature in the context of the problem of degrading selection, the markets for used cars ("lemons"), insurance services, labor markets and credit, many other studies have appeared. These studies indicate the existence of similar problems in other markets: an online trading market [8], an online auction market [9], a banking services market [10], a book market [11], a computer technology market [12], a collateral market [13], a housing and real estate market [14], a construction market [15], a market for securities and IPO [16], a service market [17], an exchange trading market [18], NPF [19], a wood market [20], a tourist services market [21], an agricultural products markets [22], an educational services market [23], a durable goods markets [24], markets for trust goods [25], government procurement markets [26], etc.…”

Section: Resultsmentioning

confidence: 95%

The problem of deteriorating (unfavorable) selection as a new barrier to the sustainable development economics

Khvalynskiy¹,

Мамченко²

2019

Proceedings of the International Conference on Sustainable Development of Cross-Border Regions: Economic, Social and Security C

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This article is devoted to the problem of a consistent reduction in the quality of goods under the conditions of the "development of capitalism" raised in the work of I. V. Rozmainsky. Also, it analyzes its impact on the sustainable development of various markets in the modern economy. The article discusses the causes of a negative impact of consumers' information constraints on the sustainable development of the economy, describes how the growth of uncertainty contributes to the transformation of degrading selection into a certain general pattern of markets, becoming a serious barrier to the economy of sustainable development. The authors concluded that the growing influence of the institutional environment on the efficiency of modern markets and proposed the creation of international institutional mechanisms for quality assurance of bona fide suppliers and manufacturers.

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“…There are several theoretical (e.g., Martinez-Miera and Repullo [29] and Gomez and Ponce [19]) and empirical (e.g. Berger, Klapper, and Turk-Ariss [8] and Jiménez, Lopez, and Saurina [24]) studies that look at non-linearity in the e↵ect of market power on bank stability.…”

Section: Related Literaturementioning

confidence: 99%

Creditor rights and the market power-stability relationship in banking

Biswas¹

2019

Journal of Financial Stability

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Please cite this article as: Swarnava (Sonny) Biswas, Creditor rights and the market power-stability relationship in banking, (2017), https://doi.Abstract I use the staggered passage of creditor rights reforms in 13 countries to examine how changes in creditor rights a↵ect a) bank stability and b) the bank market power-stability relationship. a) There is statistically weak evidence that stronger creditor rights enhance bank stability; the result is not robust across specifications. b) Market power positively a↵ects stability. However, there is asymmetry in the e↵ect of market power on stability, depending on whether there is an increase or a decrease in creditor rights. The market power-stability relationship is stronger when a country weakens its creditor rights vis-á-vis when it strengthens its creditor rights.

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Bank Competition and Loan Quality

Cited by 22 publications

References 28 publications

Bank competition, stability, and intervention quality

Bank competition, stability, and intervention quality

The problem of deteriorating (unfavorable) selection as a new barrier to the sustainable development economics

Creditor rights and the market power-stability relationship in banking

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