EconPapers    
Economics at your fingertips  
 

Bank competition and financial stability in Asia Pacific

Fu, Xiaoqing (Maggie), Lin, Yongjia (Rebecca) and Philip Molyneux ()

Journal of Banking & Finance, 2014, vol. 38, issue C, 64-77

Abstract: Analysis of the tradeoff between competition and financial stability has been at the center of academic and policy debate for over two decades and especially since the 2007–2008 global financial crises. Here we use information on 14 Asia Pacific economies from 2003 to 2010 to investigate the influence of bank competition, concentration, regulation and national institutions on individual bank fragility as measured by the probability of bankruptcy and the bank’s Z-score. The results suggest that greater concentration fosters financial fragility and that lower pricing power also induces bank risk exposure after controlling for a variety of macroeconomic, bank-specific, regulatory and institutional factors. In terms of regulations and institutions, the results show that tougher entry restrictions may benefit bank stability, whereas stronger deposit insurance schemes are associated with greater bank fragility.

Keywords: Bank competition; Financial stability; Regulation; Banks in Asia Pacific (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (75) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0378426613003804
Full text for ScienceDirect subscribers only

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:eee:jbfina:v:38:y:2014:i:c:p:64-77

Access Statistics for this article

Journal of Banking & Finance is currently edited by Ike Mathur

More articles in Journal of Banking & Finance from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-04-11
Handle: RePEc:eee:jbfina:v:38:y:2014:i:c:p:64-77