Banking structure and financial stability: a comparison of Chinese and German banking systems

Conglu Cai ()
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Conglu Cai: Department of Finance and Banking, Xiamen University, Xiamen 361005, China

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2006, vol. 1, issue 3, 433-448

Abstract: In the process of financial globalization and diversification, the issue of financial stability has become heated all over the world. This paper attempts to uncover the delicate relationship between banking structure and financial stability by comparing and analyzing the situation of the Chinese and German banking systems. This paper suggests that (i) the trade-off between competition and concentration in banking industry is a vital factor to maintain financial stability and (ii) concentration is not always a bad thing for financial stability, especially in banking systems with discontent bank performance.

Keywords: banking structure; financial stability; Chinese banking system; German banking system (search for similar items in EconPapers)
JEL-codes: G21 N20 (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:fec:journl:v:1:y:2006:i:3:p:433-448

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