Wpływ struktury rynku i wielkości banków na stabilność sektorów bankowych UE

Małgorzata Pawłowska

Published : 2023-11-21

Vol. 63 No. 2 (2016)

The impact of the market structure and size of the banks on financial stability of EU

Małgorzata Pawłowska

Abstract

The aim of this paper is to present the role of market structure and competitive framework for sound of European Union (EU) banking sector, with particular emphasis on the change in concentration and competition, in an attempt to determine the relationship between size and competition and risk-taking by European Union banks.
The empirical results based on panel data analysis using GMM find that the banking sectors with EU-27 are not homogeneous and find asymmetry between performance of EU-15 and EU-12 banking sectors. In fact, we have obtained different results concerning the impact of competition and size on financial stability for EU-15 banks (i.e., large banking sectors) and for EU-12 (i.e., small banking
sectors). Factor having a positive impact on stability in the banking sectors of the EU-15 is competition, while in the banking sectors of the EU-12 this factor is market power. Generally, we find that the size of the banking sector estimated as the share of assets in GDP has a negative impact on the stability of the banking sectors in both (the EU-15 and EU-12). In addition, we find that the ability to repay loans is procyclical especially in the EU-12.

Keywords:

banking and finance, market structure, fifnancial stability, business cycle, European Union (EU)

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Pawłowska, M. (2023). The impact of the market structure and size of the banks on financial stability of EU. Safe Bank, 63(2), 21–49. Retrieved from https://ojs.bfg.pl/index.php/bb/article/view/294

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