The stability-concentration relationship in the Brazilian banking system

E.J. Chang, S.M. Guerra, Eduardo José Araújo Lima () and Benjamin Miranda Tabak ()

Journal of International Financial Markets, Institutions and Money, 2008, vol. 18, issue 4, pages 388-397

Abstract: In this article, the relation between non-performing loans (NPL) of the Brazilian banking system and macroeconomic factors, systemic risk, and banking concentration is empirically tested. In evaluating this relation, we use a dynamic specification with fixed effects, while using a panel data approach. The empirical results suggest that the banking concentration has a statistically significant impact on NPL, suggesting that more concentrated banking systems may improve financial stability. These results are important for the design of banking regulation policies.

Date: 2008

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Related works:
Working Paper: The Stability-Concentration Relationship in the Brazilian Banking System (2007)
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Persistent link: http://EconPapers.repec.org/RePEc:eee:intfin:v:18:y:2008:i:4:p:388-397

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