Bank competition and financial stability: Evidence from the financial crisis

Akins, B, Li, L, Ng, J and Rusticus, T (2016) Bank competition and financial stability: Evidence from the financial crisis. Journal of Financial and Quantitative Analysis (JFQA), 51 (1). pp. 1-28. ISSN 0022-1090

Abstract

We examine the link between bank competition and financial stability using the recent financial crisis as the setting. We utilize variation in banking competition at the state level and find that banks facing less competition are more likely to engage in risky activities, more likely to face regulatory intervention, and more likely to fail. Focusing on the real estate market, we find that states with less competition had higher rates of mortgage approval, experienced greater inflation in housing prices before the crisis, and experienced a steeper decline in housing prices during the crisis. Overall, our study is consistent with greater competition increasing financial stability.

More Details

Item Type: Article
Subject Areas: Accounting
Additional Information: © 2016 Michael G. Foster School of Business, University of Washington
Subjects: C > Competition
Date Deposited: 07 Dec 2016 11:32
Last Modified: 26 Mar 2019 14:10
URI: http://lbsresearch.london.edu/id/eprint/762
More

Export and Share


Download

Full text not available from this repository.

Statistics

Altmetrics
View details on Dimensions' website

Downloads from LBS Research Online

View details

Actions (login required)

Edit Item Edit Item