Market Power, Liberalization, and Deregulation in the Spanish Banking Sector between 1971 and 2018. New Evidence

Josep Dols-Miro (), Joaquim Cuevas () and Juan Fernández de Guevara ()
Additional contact information
Josep Dols-Miro: Universitat de València, Valencia, Spain
Joaquim Cuevas: Universitat de València, Valencia, Spain
Juan Fernández de Guevara: Instituto Valenciano de Investigaciones Económicas (IVIE), Valencia, Spain

No 2402, Documentos de Trabajo (DT-AEHE) from Asociación Española de Historia Económica

Abstract: This study links the evolution of market power in the Spanish banking sector since 1971 with changes in banking regulation between 1970 and 1990. The main contributions are: 1) An exhaustive chronology of liberalization and deregulation measures in the sector during those years is provided; and 2) Market power is empirically measured for over 40 years using the Lerner Index. A decrease in market power in the 70s was observed, coinciding with increased competition through the branch network, followed by an increase in the 80s, as the liberalization process was affected by the economic cycle. Since 1988, competition intensified with the consolidation of liberalization measures. The results allow for an additional hypothesis in the literature analyzing competition in the Spanish banking sector: There seems to be no evidence that the bulk of deregulation was the trigger per se for rivalry. Rather, it appears that entities anticipated, taking advantage of the imminent changes, and the increase in competition was early. Possibly, it was not the regulatory changes. The latent rivalry between entities took advantage of the opportunities offered by liberalization.

Keywords: Spain; Banking History; Regulation; Lerner Index (search for similar items in EconPapers)
JEL-codes: D40 G18 N20 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2024-04
New Economics Papers: this item is included in nep-ban, nep-com, nep-fdg, nep-his and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://media.timtul.com/media/web_aehe/DT-AEHE-2402_20240417074449.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ahe:dtaehe:2402

Access Statistics for this paper

More papers in Documentos de Trabajo (DT-AEHE) from Asociación Española de Historia Económica Contact information at EDIRC.
Bibliographic data for series maintained by Andreu Seguí Beltrán ().