Working Paper: NBER ID: w9921
Authors: Thorsten Beck; Asli Demirgüç-Kunt; Ross Levine
Abstract: Motivated by public policy debates about bank consolidation and conflicting theoretical predictions about the relationship between the market structure of the banking industry and bank fragility, this paper studies the impact of bank concentration, bank regulations, and national institutions on the likelihood of suffering a systemic banking crisis. Using data on 70 countries from 1980 to 1997, we find that crises are less likely in economies with (i) more concentrated banking systems, (ii) fewer regulatory restrictions on bank competition and activities, and (iii) national institutions that encourage competition.
Keywords: No keywords provided
JEL Codes: G21; G28; L16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Bank Concentration (G21) | Probability of Systemic Crises (G01) |
| Regulatory Restrictions (L51) | Probability of Systemic Crises (G01) |
| National Institutions (D02) | Probability of Systemic Crises (G01) |