Bank Competition, Risk and Asset Allocations:
We study a banking model in which banks invest in a riskless asset and compete in both deposit and risky loan markets. The model predicts that as competition increases, both loans and assets increase; however, the effect on the loans-to-assets ratio is ambiguous. Similarly, as competition increases,...
Gespeichert in:
| 1. Verfasser: | |
|---|---|
| Format: | Elektronisch E-Book |
| Sprache: | English |
| Veröffentlicht: |
Washington, D.C
International Monetary Fund
2009
|
| Schriftenreihe: | IMF Working Papers
Working Paper No. 09/143 |
| Online-Zugang: | UBW01 UEI01 LCO01 SBR01 UER01 SBG01 UBG01 FAN01 UBT01 FKE01 UBY01 UBA01 FLA01 UBM01 UPA01 UBR01 FHA01 FNU01 BSB01 TUM01 Volltext |
| Zusammenfassung: | We study a banking model in which banks invest in a riskless asset and compete in both deposit and risky loan markets. The model predicts that as competition increases, both loans and assets increase; however, the effect on the loans-to-assets ratio is ambiguous. Similarly, as competition increases, the probability of bank failure can either increase or decrease. We explore these predictions empirically using a cross-sectional sample of 2,500 U.S. banks in 2003, and a panel data set of about 2600 banks in 134 non-industrialized countries for the period 1993-2004. With both samples, we find that banks'' probability of failure is negatively and significantly related to measures of competition, and that the loan-to-asset ratio is positively and significantly related to measures of competition. Furthermore, several loan loss measures commonly employed in the literature are negatively and significantly related to measures of bank competition. Thus, there is no evidence of a trade-off between bank competition and stability, and bank competition seems to foster banks'' willingness to lend |
| Beschreibung: | 1 Online-Ressource (35 p) |
| ISBN: | 1451872909 9781451872903 |
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| illustrated | Not Illustrated |
| index_date | 2024-07-03T20:13:27Z |
| indexdate | 2024-07-10T09:35:35Z |
| institution | BVB |
| isbn | 1451872909 9781451872903 |
| language | English |
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| series2 | IMF Working Papers |
| spelling | Boyd, John H. Verfasser aut Bank Competition, Risk and Asset Allocations Boyd, John H Washington, D.C International Monetary Fund 2009 1 Online-Ressource (35 p) txt rdacontent c rdamedia cr rdacarrier IMF Working Papers Working Paper No. 09/143 We study a banking model in which banks invest in a riskless asset and compete in both deposit and risky loan markets. The model predicts that as competition increases, both loans and assets increase; however, the effect on the loans-to-assets ratio is ambiguous. Similarly, as competition increases, the probability of bank failure can either increase or decrease. We explore these predictions empirically using a cross-sectional sample of 2,500 U.S. banks in 2003, and a panel data set of about 2600 banks in 134 non-industrialized countries for the period 1993-2004. With both samples, we find that banks'' probability of failure is negatively and significantly related to measures of competition, and that the loan-to-asset ratio is positively and significantly related to measures of competition. Furthermore, several loan loss measures commonly employed in the literature are negatively and significantly related to measures of bank competition. Thus, there is no evidence of a trade-off between bank competition and stability, and bank competition seems to foster banks'' willingness to lend Online-Ausg De Nicoló, Gianni Sonstige oth Jalal, Abu M. Sonstige oth http://elibrary.imf.org/view/IMF001/10248-9781451872903/10248-9781451872903/10248-9781451872903.xml Verlag URL des Erstveröffentlichers Volltext |
| spellingShingle | Boyd, John H. Bank Competition, Risk and Asset Allocations |
| title | Bank Competition, Risk and Asset Allocations |
| title_auth | Bank Competition, Risk and Asset Allocations |
| title_exact_search | Bank Competition, Risk and Asset Allocations |
| title_exact_search_txtP | Bank Competition, Risk and Asset Allocations |
| title_full | Bank Competition, Risk and Asset Allocations Boyd, John H |
| title_fullStr | Bank Competition, Risk and Asset Allocations Boyd, John H |
| title_full_unstemmed | Bank Competition, Risk and Asset Allocations Boyd, John H |
| title_short | Bank Competition, Risk and Asset Allocations |
| title_sort | bank competition risk and asset allocations |
| url | http://elibrary.imf.org/view/IMF001/10248-9781451872903/10248-9781451872903/10248-9781451872903.xml |
| work_keys_str_mv | AT boydjohnh bankcompetitionriskandassetallocations AT denicologianni bankcompetitionriskandassetallocations AT jalalabum bankcompetitionriskandassetallocations |