European Parliament Library

Banking Competition and Capital Ratios, Martin Cihak, Klaus Schaeck

Contributor
Abstract
We use data for more than 2,600 European banks to test whether increased competition causes banks to hold higher capital ratios. Employing panel data techniques, and distinguishing between the competitive conduct of small and large banks, we show that banks tend to hold higher capital ratios when operating in a more competitive environment. This result holds when controlling for the degree of concentration in banking systems, inter-industry competition, characteristics of the wider financial system, and the regulatory and institutional environment
Table Of Contents
Contents; I. Introduction; II. Data and Methodology; A. The H-Statistic; B. Additional Explanatory Variables; C. Econometric Approach; D. Data and Summary Statistics; III. Main Results; IV. Robustness Checks; A. The Wider Financial System; B. The Institutional and Regulatory Environment; C. Further Robustness Tests; V. Conclusion; Tables; 1. H-Statistics; 2. Descriptive Statistics; 3. Competition and Capital Ratio; 4. Quantifying the Effect of Increases in the H-Statistic on the Capital Ratio; 5. Competition, Capital Ratio, and the Wider Financial System
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (42 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9780146235580

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