Market Structure and the Banking Sector

Benoit Julien and Pedro Gomis-Porqueras

Economics Bulletin, 2007, vol. 4, issue 24, 1-9

Abstract: We propose a simple framework to explore how different market structures in the banking system affect credit allocation, and how deposits and number of entrepreneurs affect the equilibrium number of banks in the economy. We find that within the Marshallian aggregate surplus perspective, the number of entrants in the banking system is always larger than the socially optimal number of banks.

Keywords: and; Entry (search for similar items in EconPapers)
JEL-codes: D4 G2 (search for similar items in EconPapers)
Date: 2007-06-18
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